Friedland Properties is suing its backyard neighbor on the Upper East Side, arguing it is halting construction on a planned extension.
The landlord has been trying to build a single-story extension on the courtyard of 817 Madison Avenue between East 68th and East 69th Streets and has received approval from the city’s Landmarks Preservation Commission, according to a lawsuit filed last month. If built, the extension would add 900 square feet of retail space to the ground-floor of the mixed-use building. But the board of directors for the residential co-op at 35 East 68th Street, who Friedland Properties is suing, has gotten an appeals court to freeze construction for the time being.
As a result, the lawsuit says, Friedland Properties has been unable to sign tenants to the retail space that once housed the flagship store for Donna Karan, who leased the entire 9,000 square-foot space until 2014. Friedland Properties hasn’t been able to lease out the 3,200 square feet of retail currently vacant in the building potential tenants are wary of the plan going through, according to the lawsuit. With asking rents at about $1,200 per square foot in the area, the landlord is losing about $320,000 a month, the lawsuit continues.
In particular, the landlord has allegedly been approached by an unnamed “high-end” potential tenant who will only play ball if it knows the extension is coming.
Friedland Properties has been somewhat successful in bringing some tenants in, however. The New York Post reported in February that Isaia, a men’s suit-maker, had signed a 15-year lease for 6,000 square feet in the building.
“It’s a desperate, desperate measure,” Adam Leitman Bailey, whose firm is representing the board of directors in the case, told Commercial Observer. “We don’t want our views blocked by their building.”
David Kanfer, the attorney representing the Friedland Properties’ LLC that owns the building, noted that 35 East 68th Street was currently up for sale (Compass is marketing it with an asking price of $39.5 million) and accused the board of trying to stop construction to make the property more appealing.
“Since the owners of 35 East 68th Street are trying to sell their building for almost $40 million, it is not surprising that they don’t want their views blocked, as their counsel stated,” he said in an email. “But that does not entitle them to assert meritless and unfounded claims, which are clearly designed to delay [the landlord]’s lawful construction that the LPC approved, and that the court has agreed should be allowed to proceed.”
The board of directors’ lawsuit stems from a 2013 proposal by Friedland Properties to build a two-story extension in the courtyard between 817 Madison Avenue and 35 East 68th Street. Because the buildings are located in a historic district, Friedland Properties needed to clear the necessary approvals before starting construction. The community pushed back, however, and Manhattan Community Board 8’s landmarks commission ditched the plan, as DNAinfo reported at the time.
Friedland Properties came back with a one-story extension plan, which was approved by the LPC. But the board of directors, according to court documents, sued trying to stop the LPC’s approval of the plan. The board’s argument was that the courtyard, for which construction is slated, was historically a shared ground between the two buildings, and thus the LPC couldn’t grant approval on the project.
When Donna Karan did work in the courtyard in 2000, however, it was deemed a non-shared space because the lower floors of 817 Madison Avenue were converted into commercial space in the 1920s, according to the most-recent lawsuit.
While that case was tossed out, the board is currently appealing and has been able to put the kibosh on construction until the case is heard by an appeals court. Lawyers for the board of directors don’t think the new lawsuit has much gravitas, however, and are still confident they can get the construction permanently stopped.
A lawyer for Friedland Properties did not immediately return a request for comment.
Update: This story was edited to include a quote from the lawyer for the owner of 817 Madison Avenue.