Last Drake Hotel site holdout drops motion stalling related development

CIM, Macklowe free of injunction filed over "dangerous" construction

New York /
Feb.February 24, 2012 03:00 PM

[Updated at 4.45 p.m. with information from an opposition filing] Jacob & Co., a high-end, premier retailer of timepieces for men and women, has withdrawn a motion for an injunction against developer CIM and its consultant on the nearby Drake Hotel site, Harry Macklowe, for disruptive construction taking place at a townhouse property adjacent to the jeweler’s headquarters at 48 East 57th Street.

The withdrawal, filed Wednesday in New York Civil Court for unknown reasons, marks the end of the developers’ latest dispute with the jeweler, whose refusal to Sell The East 57th Street property previously caused CIM some headaches

CIM had been sizing up the building, hoping to make it part of its portfolio of adjacent properties at 38, 40, 42, 44, 46 and 50 East 57th Street. The California-based private equity firm, which kept Macklowe on as a development advisor after he defaulted on the property in 2007, wanted to raze it as part of its Drake Hotel master plan. If Jacob & Co. stayed put, it would have meant the project would have had a reduced amount of sidewalk frontage — 101 rather than 150 feet. The jeweler refused to sell despite the other remaining holdout, British retailer Turnbull & Asser, giving up the ghost last year and selling 42 East 57th Street.

Jacob & Co. originally filed for damages related to the construction in October, according to the original complaint. The suit said that the developers had begun demolition of building 46 and had failed to take adequate steps to protect the Jacob & Co. property from being damaged. Everest Scaffolding and Lend Lease Construction were also named in the motion as defendants for their parts in the project, including the erection of scaffolding at the site.

“The defendants’ actions have created a hazardous and dangerous environment, and have prevented plaintiffs from quietly enjoying their property, and from operating their business, thereby causing a significant loss of revenue,” the motion states.

Jacob & Co. complained that construction workers hired by CIM had accidentally severed a utility wire that connected phone and Internet service to the retailer, which had a “devastating impact” on the business. Blue scaffolding erected by workers also obscured the jewelry store’s entryway from public view, Jacob & Co. said in the motion, which impacted revenue; it was not immediately clear how much revenue had been lost. Construction materials, vehicles, dumpsters and debris were also alleged to have been left routinely in front of the jeweler’s property, creating safety hazards. The jeweler also complaint about excessive noise from drilling.

The “plaintiffs have been forced to expend funds for cleaning and repairs,” the motion says.

The amount of damages the plaintiff was seeking was not clear from the filing, and was to be “decided at trial,” according to the motion.

An opposition filing stated that Jacob had failed to establish that there was a violation of its rights in the case, “let alone a violation sufficient to support the drastic relief” that the jeweler was seeking.

Addressing Jacob & Co.’s noise complaints, the filing argued: “Excavation, including drilling into the layers of rock that lie under much of Manhattan, is a necessary — and temporary — step in construction, and each property owner has a general right to develop his or her own property.”

Neither the plaintiffs, defendants nor their legal representatives were immediately available for comment. An attorney for Land Lease declined to comment.

As The Real Deal previously reported, CIM paid British retailer Turnbull & Asser $32.4 million for its townhouse at 42 East 57th Street in November.  The California developer later transferred ownership of another property it owned down the street, at 50 East 57th Street, to the retailer for $31.5 million as a replacement headquarters.


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