A pair of developers and Upper West Side community activists have been raging a paper crusade against each other over a 670-foot-tall tower that might, as collateral damage, count Department of Buildings guarantees as a casualty.
The building in question, a luxury condominium at 200 Amsterdam Avenue near West 69th Street, was developed on a giant superblock that includes several other new condos and apartment buildings, some retail stores, a garage, and the new Lincoln Square Synagogue, which was once at 200 Amsterdam.
In February 2020, after 200 Amsterdam was already topped out and construction nearing completion, New York State Supreme Court Justice W. Franc Perry ordered the Department of Buildings to follow what was an older draft of a legal memo to amend DOB guidelines for recalculating the floor area for the tower that would require perhaps lopping off as many as 20 floors.
“The judge was completely non-specific and had no idea what he was asking,” said Paul Selver, the Kramer Levin attorney representing 200 Amsterdam’s developers, SJP Properties and Mitsui Fudosan America.
The building simply won’t be decapitated, they say, and if it did, Selver and other experts say DOB would have to go back and invalidate the certificates of occupancy for several other occupied apartment buildings that were built under the same 40-plus years of zoning rules, something that’s probably never going to happen.
“Even if it remains in a cloud, and is not resolved, title companies would get nervous about sales and mortgages if you have a questioned certificate of occupancy,” claimed Michael Parley, a zoning consultant who created the original subdivisions of the block in 1987 and also advised SJP.
In March, the city agreed to join the developer’s appeal of the recent state Supreme Court ruling.
Developers and the city filed briefs on July 13 with the West Side community activists’ reply brief coming soon. An oral argument in the Appellate Division, First Department is now expected in September but depends on coronavirus issues and the court’s calendar.
But how did 200 Amsterdam get into such a height and legal quagmire in the first place?
The entire 20-acre superblock was pieced together under Title 1 of the 1949 U.S. Housing Act that was to assist communities with slum clearance and redevelopments.
The urban renewal plan prohibited changing certain portions of the site for 50 years – but would expire around 2004 – leading to lots of creative development thinking, especially by Daniele Bodini, the head of American Continental Properties.
The plan also created the nearby Lincoln Center. Catercorner to its northwest, planners set aside the superblock that ranged from West 66th to West 70th Streets and Amsterdam to West End Avenue for the white buildings of Lincoln Towers, whose additional buildings would also rise on the west side of West End Avenue.
The urban renewal plan for this primarily Black and Hispanic neighborhood, known as San Juan Hill, was designed by Robert Moses, who headed the Mayor’s Committee on Slum Clearance; on May 14, 1959, President Dwight D. Eisenhower broke ground on Lincoln Center before 12,000 people as famed conductor Leonard Bernstein led The Juilliard School’s orchestra and chorus in Handel’s “Hallelujah.”
The future Lincoln Towers housing project itself had to wait until the Sharks and the Jets in the 1961 “West Side Story” movie wrapped up filming. At that point, the block’s now-vacant tenements were demolished, and construction began on the five distinctive, white-brick Lincoln Towers buildings on the east side of West End Avenue.
Three other Lincoln Towers buildings were developed to the west of West End Avenue but backed up to the railyards owned by the future president, Donald Trump. Years later, after massive community opposition, Trump agreed to restrictions on the size and shape of those buildings, and the site was developed into the long stretch of tall apartment towers along Riverside Boulevard.
Opposition to development is a hallmark of the neighborhood’s residents, and the battle over Trump’s plans for Riverside South was another notch on its belt.
One of those community groups, the Committee for Environmentally Sound Development, led by Olive Freud, was among the drivers of the complaints and lawsuits against the redevelopment of other projects before 200 Amsterdam.
In 2014, the now 90-year-old Freud convinced a court to order Lincoln Center to restore the gardens and trees of Damrosch Park, which it had ripped up in 2010 to monetize by renting to events such as Fashion Week. “We’ve got all the developers in New York City up in arms,” Freud told the New York Post after the court ruling against 200 Amsterdam.
The eight buildings of Lincoln Towers were developed between 1961 and 1964 for $70 million by Webb & Knapp, at that time led by the late William Zeckendorf (father of the developer of the same name).
Webb & Knapp eventually sold the rental project to the Aluminum Company of America (Alcoa). To protest rent hikes, residents began hanging bed sheets out the windows. In late 1966, a judge ordered tenants to take down the sheets, and in a nod to Alcoa, not display “aluminum foil or any other offensive or inappropriate items.”
Alcoa sold the buildings in 1976 to the John T. and Catherine D. MacArthur Foundation. At the end of 1984, the Foundation put them up for sale again, with an eye on the new owners converting the property to cooperative or condominium ownership.
Meanwhile, the city had adopted a new, massive zoning resolution in 1961, but through amendments, it took on a life of its own. “It is an ad-hoc, convoluted, chaotic non-plan for the City, held together by binders rather than a common vision,” attorney Norman Marcus would later write in 1992 in the Fordham Urban Law Journal.
Marcus, who was among those who approved the subdivisions created on the Lincoln Towers site, also warned of the zoning resolution, “Tinker with one part, and another part’s assumptions are thrown out of whack.”
But a key zoning change came in 1977, when City Planning approved an amendment that stated in part, “[a] zoning lot … may or may not coincide with a lot as shown on the official tax map …”
This small change became a big one for developers, as it opened the door to buying and incorporating unused portions of underbuilt lots – where the current structure is smaller than allowed — into a developer’s site in order to build a larger building.
In May 1978, to create the rules and regulations applicable to the amendment, then-acting Department of Buildings Commissioner Irving Minkin wrote a lengthy memo that included a key phrase for developers saying that title companies would need to certify the composition of the lot “which may consist of one or more tax lots or parts of tax lots … before he can obtain a building permit or certificate of occupancy.”
“The Minkin Memo wasn’t a cavalier exercise, ‘a zoning lot could be this,’ but very substantive; and it goes on for several pages and includes exhibits,” said Parley, who later advised the developers of every single new building on the superblock.
This Minkin memo was extensively discussed with and formally sent to Marcus, at that time counsel to City Planning, before being published as the city’s formal rules for the creation of zoning lots. “Neither objected to this interpretation,” said Kramer Levin’s Selver.
The Minkin memo was also sent to various industry associations so they would understand how the zoning rules would apply to their members’ projects.
“Minkin’s memo was construing a statute that was not clear on its face,” Selver explained. “The zoning lot definition is … opaque, so you needed the Buildings Department to interpret it.”
In 1984, third-generation residential developer Martin Raynes and his partners Robert Stang along with William Weiner of M.J. Raynes, teamed up with Bernard Mendik’s The Mendik Company and The Equitable Life Assurance Society (as the main equity provider) to buy Lincoln Towers from the MacArthur Foundation with the expected eye on a co-op conversion.
In the largest real estate transaction in history at the time, the $480 million deal covered 6,200 apartments in 45 buildings. (Along with the Lincoln Towers complex, it included apartments in Great Neck, Elmhurst and on Manhattan’s East Side.)
Now in private practice, Parley was hired to divide up the superblock and prepare it for the conversion.
“It was carefully done and carefully vetted by the Department of Buildings,” Parley recalls. “It was extensively reviewed in 1987, and then each time another building permit was proposed – at least four additional times.”
One of the reasons for cutting up the superblock, he said, was so the developers would not need to consult or get permission to transfer development rights from the Lincoln Towers’ residents and boards for any of the future projects.
The five buildings were placed on one “residual” lot that was separate from everything else. “That has never changed since 1987,” Parley says.
Additional land between the buildings, and low-rise retail “taxpayers” at 200 West End Avenue and along Amsterdam Avenue, plus a former Chase bank and the old synagogue that ultimately became the site of 200 Amsterdam, were placed in the other “Future Development Zoning Lot (FDZL).”
The subdivisions were reviewed and accepted by DOB, both Parley and Selver recalled, and about a month later, Parley merged the new FDZL with the additional site for the future 200 West End Avenue and the future sites of 160, 170 and 180 Amsterdam.
“This set the stage for the developments,” Selver said.
The Raynes group proffered a non-eviction cooperative plan worth $900 million to the 12,000 residents, and sales began in December 1986. Approximately 65 percent of the units were sold, with most to insiders at discounts of around 55 percent off the $130,000-to-$450,000 price tags. According to the brokerage Residence Resource, by May 1987, the 3,837 apartments of Lincoln Towers were formally converted to cooperative ownership. The rest were occupied with rent-regulated tenants.
But by 1990, the city’s real estate market was tanking, and sponsors who were still responsible for the maintenance payments on the unsold shares were handing them to lenders.
“The problem was we had debt on the complex, and interest rates went to 16 percent,” recalled a person involved in the conversion, requesting not to be identified. “We never thought about further development on the site.”
Raynes filed for bankruptcy in 1991. (It should be noted he enjoyed a lavish lifestyle with his wife, socialite Patricia Davis, whose father was the Hollywood financier Marvin Davis, who owned and traded assets like 20th Century Fox and the Beverly Hills Hotel.)
As Raynes publicly crashed, and the Urban Renewal Plan restrictions had not much longer to run, Daniele Bodini, an Italian-born New York developer who in 2005 became the Ambassador of the Republic of San Marino to the United Nations, actively began pursuing the superblock.
Bodini first bought the debt from Chase, the lender on the site, and later the property itself. (Bodini did not return requests for comment.) He eventually also bought the rights to several other parcels such as 200 West End Avenue from Tishman Speyer for $21.3 million in 2002.
But Bodini did not succeed in the 2004 purchase of the former American Red Cross building at 150 Amsterdam, which sold to the H&R Hakimian family for $72.32 million.
Despite the earlier creation of the two zoning lots by Parley, so the Lincoln Tower boards wouldn’t need to be asked for permission for further development, Bodini wanted to transfer the project’s development rights around the giant site without having to worry about complaints from locals or anti-development activists.
Bodini therefore hashed out a Declaration and Confirmatory Agreements with the Lincoln Tower boards and its umbrella association. Signed and filed with the city registrar in December 2005, it included detailed diagrams showing what could be built on each vacant site.
Included was the site of 200 Amsterdam that had been owned since 1962 by the Lincoln Square Synagogue, where future Supreme Court Justice Elena Kagen celebrated the temple’s first bat mitzvah.
In early 2006, the temple agreed to sell its now-old building and site to Bodini’s American Continental Properties for $27.7 million. Bodini would build a new temple for the congregation, just 100 yards south, at 180 Amsterdam Avenue, a site he owned and would sell to the congregation. When the congregation marched to the new building with its torahs in early 2013, Rabbi Shaul Robinson told DNAinfo that the development coming up at 200 Amsterdam would be 50 or 60 stories tall.
Somehow, that information had slipped by the rest of the activist Upper West Side community. Bodini’s Lincoln Towers agreement – which specified the 601-foot height at the site of 200 Amsterdam – also set forth guidelines for the construction of two other apartment buildings as well as the site of the now-new Lincoln Square Synagogue.
But in Dec. 2005, Bodini did not yet own the “North” parcel, which was the future site of 200 Amsterdam. The Dec. 2005 agreement spelled out that if this “North” site was to later be merged into the development lot, the new building would not use more than 408,000 square feet of “floor area development rights,” have no more than 60 above-grade floors, and a height of 601 feet (not including parapet and mechanical screening.)
“We checked everything, we had other people double check things to make sure whatever we did was right,” said Andrew Droggin, now a retired attorney who coincidentally lived in Lincoln Towers and did legal work for Bodini throughout the years.
However, the Lincoln Towers agreements were never filed on the city register’s page for the synagogue’s block and lot at 200 Amsterdam because Bodini did not own it until December 2007, although the lot number was noted within the document.
In May 2006, Bodini sold the site at 200 West End Avenue for $97.5 million to the Claret Group, which was advised by both Parley and Selver, and its new building application was approved by DOB in 2006. Under the same zoning rules and as part of the FDZL, it was developed into 191 condos designed by the late-Costas Kondylis, and issued its temporary certificate of occupancy in 2007.
In 2015, upon request from Bodini, Parley created another subdivision of the main lot, which was approved by DOB. This one separated the lot for 170 Amsterdam and the new Lincoln Square Synagogue from those lots holding 200 West End Avenue and 200 Amsterdam.
As SJP considered buying the 200 Amsterdam site, Selver says they re-confirmed that the site and zoning conformed to DOB’s interpretation of the zoning.
“They saw nothing in the Buildings Department record that constituted an objection to partial tax lots, so there was no basis to believe what was done in the past wasn’t correct,” Selver said.
Over the past 40 years, there have been 34 times the DOB issued permits based on parts of lots, Selver says, covering over 20 buildings.
SJP Properties and partner Mitsui Fudosan America purchased the site for $275 million on Oct. 15, 2015, and have spent around another $70 million on its construction.
Designed by Elkus Manfredi Architects, permits for the 52-story luxury condominium at 200 Amsterdam were filed with the DOB on April 20, 2017, which issued the permits on May 9, 2017.
But within the next week a Zoning Challenge was filed by George M. James, on behalf of the Committee for Environmentally Sound Development. James, a zoning advisor, said he didn’t realize that the Lincoln Towers agreement existed until long after filing that first zoning challenge to the proposed 200 Amsterdam, which instead cited disagreements over open spaces and mechanical spaces.
That initial challenge letter was also signed by Manhattan Borough President Gale Brewer, the area’s City Council Member Helen Rosenthal, along with Kate Wood, who heads another area community group, Landmark West!
After a month-long review, DOB ordered the permits revoked on June 23, but reissued the permits in September.
Finally, contractors began mobilizing at the site on Oct. 5, 2017, and shovels formally hit the ground for site work on Oct. 12, 2017.
Before the month was out, a Board of Standards and Appeals Challenge was filed by the community groups, which included the Municipal Art Society, and DOB posted a response disagreeing with the new challenge.
During this whole time DOB was being barraged by the community activists and elected officials, and on Jan. 31, 2018, its assistant general counsel, Michael Zoltan, began circulating a version of a 10-year-old proposal to amend the Minkin memo through the real estate community.
This new version of the old memo was designed to get feedback on some suggested rules for zoning lot formation. But zoning pros noticed it suddenly contained a new parenthetical section with regard to the definition of a lot.
This draft suggested that a subdivision would be “a tract of land that consists of one tax lot or two or more tax lots (not parts of tax lots).”
It’s that draft and “not parts of tax lots” on which the activists now hung their case.
At the first Board of Standards & Appeals (BSA) hearing on March 27, 2018, DOB argued that the 200 Amsterdam permit was legal because the new memo that the activists now raised was merely a draft and not an official rule.
In a letter to the BSA affirming the legality of the permit, Zoltan said the DOB concluded that it was required to issue the permit “to avoid acting arbitrarily and capriciously.”
A second BSA hearing was held on June 5, and it voted on July 17, 2018, to uphold the permit, issuing its resolution on Sept. 7, 2018.
The community filed an Article 78 on Oct. 9, 2018, with the state court. Justice W. Franc Perry vacated the BSA decision on March 14, 2019, and ordered the matter back to the BSA for another review.
But the BSA voted again on June 25, 2019, to uphold the permit, and sources believe the judge was incensed that they didn’t change their views. As expected, the opponents returned to court.
In August 2019, the building topped out at 668 feet. Justice Perry then issued the infamous Feb. 2020 ruling that ordered the DOB to recalculate the permitted building envelope using that new draft DOB memo, which conformed to the community’s zoning definition.
“What the judge did here approaches a taking,” Selver insists. “It retroactively revoked a permit on the basis of a proposal by the Department of Buildings to modify the interpretation of the Minkin memo.”
By this time, the developers had expended over $311 million on a 52-story project that has its 112 units being pitched for a range of $2.625 million to $7.974 million with two penthouses being marketed for around $40 million each.
It took another month before the city agreed to back the DOB and Board of Standard & Appeals decisions and filed an appeal of Justice Perry’s ruling with the Appellate Division, First Department.
That filing and another judge stayed the order to remove portions of the building and instead, construction kept going. The judge, however, stopped the developers from marketing their units. But now, the coronavirus intervened, and the state’s executive orders caused construction to focus on closing up the building’s curtain wall so the CetraRuddy-designed interiors wouldn’t be ruined.
“If allowed to stand,” the developer’s Appellate brief states, “Trial Court’s decision will call into question numerous other buildings across New York City (occupied by thousands) with approvals premised on zoning lots containing partial tax lots. It will chill real estate investment in New York City and leave developers, investors, and lenders with zero confidence that courts will not retroactively change long-standing rules governing their projects—even after they have made substantial investments in reasonable reliance on those rules.”
“If we can’t rely on 40 years of Buildings Department practice,” Selver added, “what can we rely on?”