The Real Deal New York

Stahl Organization sues city over landmark rentals

Firm looks to overturn 2006 ruling on two Lenox Hill buildings
By Adam Pincus | September 25, 2014 06:30PM

The real estate investment firm the Stahl Organization is asking a federal court to overturn a landmarking designation from 2006, claiming a pair of century-old buildings in Lenox Hill should be open for demolition and redevelopment.

Stahl is hoping to overturn the seven-year-old decision from the Landmarks Preservation Commission designating the six-story walk-ups at 430 East 65th Street and 429 East 64th Street, facing York Avenue, as historic structures.

The real estate firm filed the complaint Monday in U.S District Court in Manhattan, after the city threw out its hardship application this year. That rejection followed an earlier loss to the city when Stahl sued in New York State Supreme Court, trying for the first time to overturn the landmarking.

The company is bringing the case to a federal court because, according to the suit, the city has deprived Stahl of its property rights without due process of law.

“In designating the buildings, the LPC succumbed to political pressure from influential residents and allied interest groups,” the complaint says. “The LPC’s denial of Stahl’s hardship application was also outrageously arbitrary and entirely irrational.”

In an apparent appeal to Mayor Bill de Blasio’s plan to build more affordable housing, the complaint says, “The LPC’s actions have blocked Stahl from pursuing exactly the kind of residential housing development this city needs.”

The firm is seeking an overturning of the landmarking designation, as well as unstated compensatory damages. The lawsuit claims the partially vacant rental buildings if redeveloped pursuant to Stahl’s plans would be worth about $200 million.

The LPC declined comment on the suit.

“While litigation is pending, we can only say that the claims raised in these lawsuits are being reviewed,” a spokesperson for the agency said.

A source close to Stahl said, “we regard the LPC ‎process as arbitrary, irrational, and unconstitutional.”

The suit is the latest chapter in a long-running dispute. Stahl says in the complaint that it purchased the pair of rental structures as part of a larger package of 15 buildings comprising the entire block between York and First avenues and 64th and 65th streets, in 1977. The company said the long-term plan was to redevelop the properties.

The city initially intended to grant landmark status to the whole block, which was built by the City and Suburban Homes Company between 1898 and 1915 and known as the First Avenue Estate. The buildings are considered historically significant because they were part of the “light-court” model that attempted to improve the living conditions for city dwellers.

But instead of including the entire block in 1990, the two buildings at 430 East 65th Street and 429 East 64th Street were removed from the designation, and the rest were made part of a city landmark.

In 2004, however, local residents heard Stahl was planning to demolish and build a high-rise on the site, and asked the LPC to add the two buildings as landmarks, which it did in 2006. Stahl filed suit in New York State Supreme Court in 2007 to block the designation, but lost. The judge at the time noted the City Council referred to the 1990 decision to remove the buildings as a “bad back-room deal.”

Stahl filed a hardship claim in 2011, but the LPC rejected that claim last May.

  • Guest

    This is NOT correct:
    “The city at first planned to designate as a landmark that whole block . . . . But instead of including the entire block in 1990, the two buildings at 430 East 65th Street and 429 East 64th Street were removed from the designation, and the rest were made part of a city landmark.”

    This IS correct:
    The City designated as a landmark that whole block. Then as part of a back room deal between Stahl and the NYC Board of Estimate (as part of their last acts as a body before they were disbanded for being unconstitutional and replaced by the current City Counsel) the two buildings . . . were removed from landmark status.

    • Monica McLaughlin

      Correction: City Council not Counsel

  • E72

    I hope the Stahl Organization prevails.

    It’s completely absurd these dumpy tenements were landmarked because of some politically connected tenants. It makes a mockery of the landmarks law, and the neighborhood is left with permanent eyesores.

    • Monica McLaughlin

      I live in First Avenue Estate, and can assure you that there are no politically connected tenants living here. The buildings are only an eyesore, because the owner, The Stahl Organization, has done every thing they can to present them as such including leaving unused dangerous dilapidated scaffolding up for years and intentionally blocking fire escape exits. (They received serious building code violations, were in court on 94, and were fined for both.)

  • marknroses

    I love Landmarking sometimes as much as the most radical preservationist, but this is not one of those cases.

  • Char4Dew

    This is insane. They Landmark this property, and investor has to fight to make it better ????
    then they sell REAL NY Landmarks like, Plaza hotel, Empire State building, and many more TO FOREIGNERS? ANY LOGIC IN THIS??? Not in my opinion….

    • Monica McLaughlin

      The entire block is a landmark. The owner is not fighting to make it better. The owner is fighting to demolish it to put up luxury housing.

      • Char4Dew

        I know – but look at it. it’s not a prewar architecture. Sometimes new is better.

        • Monica McLaughlin

          Not all landmark buildings receive that status for their beauty. And even of those that are beautiful, it is not enough for a building to achieve landmark status. History is important. These buildings were made a landmark for their historical value.