Olmstead not likely to evict NYU cancer research facility

Landlord, university set to resolve issues leading to lease termination notice at 180 Varick St.

TRD New York /
Nov.November 17, 2015 08:30 AM

The dispute between New York University and Olmstead Properties over NYU Langone Medical Center’s lease at a Hudson Square office building may be much ado about nothing — with a Manhattan judge upholding an injunction against Olmstead today and both sides looking to resolve the matter out of court.

NYU filed suit against the Samuel Rosenblatt-led landlord last week in the hopes of blocking a five-day lease termination notice served by Olmstead on Wednesday at 180 Varick Street, where NYU Langone operates a cancer research facility.

The university obtained a temporary injunction against Olmstead on Friday in New York State Supreme Court, effectively stopping the clock on the lease termination notice. On Monday, a judge upheld that injunction and adjourned the matter to Dec. 9, providing the parties more time to resolve the dispute.

The lease termination notice at 180 Varick Street — where NYU Langone occupies five floors on a 15-year lease that it signed in 2010 – was allegedly motivated by the university’s failure to address several violations that the building, according to the lawsuit filed by NYU.

Those violations included tens of thousands of dollars of outstanding mechanic’s liens related to a $10 million renovation of NYU’s space, as well as Department of Buildings citations for problems with the building’s dumbwaiter.

But NYU claimed that it had “done (and continues to do) everything in its power to resolve those issues,” and sources said the two sides appear set to reach a resolution that will keep the cancer research facility at its space at 180 Varick Street.

“It looks like [NYU] are in the process of removing the violations that were the basis of the [lease termination] notice,” Jeffrey Klarsfeld of law firm Platte, Klarsfeld, Levine & Lachtman, which is representing Olmstead, told The Real Deal. “They’ve already removed the mechanic’s liens and are in the process of removing the elevator violations of record.”

“Our goal was always to get these violations and mechanic’s liens off the building,” Klarsfeld added, noting that Olmstead served the lease termination notice “to cure a response from the tenant.”

“The liens were encumbering the building,” he said. “The landlord wanted them off and we weren’t getting an adequate response from the tenant.”

Legal representatives for NYU declined to comment on the matter.

NYU Langone uses its space at the 17-story, 329,000-square-foot property to conduct research work on ovarian cancer, Barth syndrome, HIV and gene therapy. In its lawsuit against Olmstead, the university said a shutdown of the Varick Street facility would have major consequences on the medical center’s research efforts.

“A significant displacement of dozens of researches would certainly result in a significant disruption and threaten ongoing research projects and experiments,” the school said in the complaint.

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