Landlord suits could delay Harlem affordable housing project

The city hopes affordable housing and large commercial structures will rise one day on a full block in Harlem now occupied by low buildings, a parking lot and a gas station. But landlords of five of the parcels says the city’s efforts to condemn the properties came too late.

The White Plains-based Heron Real Estate filed a lawsuit yesterday in New York State Supreme Court claiming a move in February to seize the properties was tardy, and should be voided.

There is a three-year statute of limitations for condemnation proceedings, and the city says it expired last February 17, while the owners say it expired on October 13, 2013, four months earlier.

The complaint names the City of New York and the city’s Economic Development Corporation as defendants. This suit follows legal filings in May by the owners of the other four parcels protesting the condemnations, all located within a block bounded by 125th and 126th streets, and Second and Third avenues.

If Heron and the other owners are victorious, it could put a kink in a plan launched during the Bloomberg administration to build as many as 1,000 units of affordable housing and retail on three blocks in the neighborhood as part of the $700 million East Harlem Media, Entertainment and Cultural Center. If the city wins the right to condemn the other four parcels, it leaves open the opportunity to acquire Heron’s parcel, with about 62,724 square feet of development rights.

Heron is concerned about the four other properties because of the city’s assertion that once the first stage of acquisitions of properties commenced, it could have up to 10 years to take other land. That, Heron argues, places a “cloud” over the land. The owners say the city’s last day to launch condemnation proceedings was in October 2013, while the city put the last date in February 2014.

“The purpose behind the three-year limitation period is to prevent the city from indefinitely casting a cloud over the targeted private property,” Heron’s attorney Stephen Meister, a partner with the law firm Meister Seelig & Fein, said in an email to The Real Deal.

The city has long-battled with the landlords on the block, and has come out ahead in state court. The city did not comment on the latest suit.

“We have not been served with this particular suit, and we will review it,” Michael Chestnov, senior counsel in the city’s Law Department, said in a statement. “However, as detailed in our legal papers in a related matter, the city has complied with all the procedural requirements, including commencing within the required timeframe, to move forward with this urban renewal project.”

The city in 1968 identified 150 blocks in Harlem and East Harlem for redevelopment. In 2008, the city approved a plan for three blocks in East Harlem, including the block between Second and Third avenues and 125th and 126th street, where the Heron gas station is located. Much of that block was owned by the city, but several parcels were privately owned.

In 2009, the city authorized the condemnation. Several property owners, including Heron, subsequently filed to stop the demolition, but the courts twice rejected their claims. In February the city filed a petition in New York State Supreme Court to condemn the other four parcels, and in May the owners filed to block that claiming the petition was filed too late. Arguments are scheduled in that case for November 3, court records show.