Judge Evicts RFR From Chrysler Building; Cooper Union Takes Control of Historic Tower
Judge Jennifer Schecter, of the New York State Supreme Court, called RFR’s defense 'the flimsiest of flimsy'
By Brian Pascus November 1, 2024 10:36 am
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Cooper Union officially took over operations of the Chrysler Building on Friday, one day after a Manhattan judge issued an injunction against Aby Rosen and Michael Fuchs’s RFR Holding, allowing the local college to begin collecting rents at the landmark office tower.
The Real Deal reported Thursday that New York State Supreme Court Judge Jennifer Schecter ruled that RFR, which purchased the Chrysler Building in 2019 for $151 million, must immediately relinquish control of the 77-story office tower to Cooper Union, which owns the land the 1920s Art Deco landmark sits on.
Cooper Union terminated RFR’s ground lease last month, after the college said Rosen’s firm hadn’t paid rent since May, having missed $21 million in ground-rent payments.
“[RFR] cannot take any steps to interfere with Cooper Union’s management or operations in control of the building,” Judge Schecter said at a hearing Thursday morning, per TRD.
A RFR spokesperson said in a statement that the firm’s stewardship of the Chrysler Building “has been exemplary” and hinted that RFR will seek alternative avenues to restore its operational ownership of the building.
“RFR’s temporary removal from the Chrysler Building, resulting in the halting of its multi-hundred-million-dollar restoration, is a tremendous loss for New York City,” the spokesperson said.
“For the sake of all New Yorkers, we hope that the attorney general and independent financial monitor, who are already involved with Cooper Union due to historical financial mismanagement, step in to make sure the Chrysler Building doesn’t fall into irreparable disrepair,” the statement added.
The land the Chrysler Building sits on has been owned by the Cooper Union school since 1902, when the private college received it as a donation from the descendants of Peter Cooper, a 19th century New York City industrialist who built the first American steam locomotive.
On Sept. 27, the school terminated the ground lease and took control of the Chrysler Building from RFR, which promptly filed a lawsuit seeking to halt the action. RFR accused Cooper Union of “acting in bad faith” by refusing to consider potential modifications in an amended ground lease that would allow for lower monthly payments.
TRD reported that RFR argued in court Thursday that Cooper Union’s termination of the lease was invalid because the school sent the lease termination notice to the wrong address, one not listed in the original lease agreement. Judge Schecter called it “the flimsiest of flimsy,” arguments.
This is not the first time RFR has gotten into trouble with either landlords or creditors.
CO reported earlier this year that Blackstone and Rialto Capital have launched foreclosure proceedings against RFR for two retail properties: One Jackson Square and 219 East 67th Street, which defaulted on loans worth $22.4 million and $20.3 million, respectively. RFR is also facing foreclosure at 522 Fifth Avenue after it defaulted on $224 million of debt in December 2023, and at 475 Fifth Avenue following default on a $180 million loan in August.
In a statement, Cooper Union said the judge “clearly agreed that we were in our rights to terminate the lease.” Meanwhile, the school has hired Cushman & Wakefield (CWK) to manage the Midtown landmark.
Brian Pascus can be reached at bpascus@commercailobserver.com.
