The Real Deal New York

Gamma says work will halt at Sutton Place condo tower after Council votes on rezoning

Developer is appealing to the Board of Standards and Appeals
By Kathryn Brenzel | November 30, 2017 06:51PM

Jonathan Kalikow and a rendering of Sutton 58

Work will grind to a halt at Gamma Real Estate’s Sutton Place condo tower now that the City Council has signed off on a rezoning that will limit the project’s scale.

The City Council on Thursday voted nearly unanimously (one abstention) to rezone 10 blocks on the Upper East Side, marking an unusual — albeit potentially temporary — victory for a community-led rezoning application. The change requires properties in the area to adhere to “tower on a base” standards, which will require 40 to 50 percent of the building to be built below 150 feet.

Because the rezoning would dramatically change the building that Gamma has planned for the site, the developer says construction will temporarily cease. Jonathan Kalikow, Gamma’s co-founder and president, has indicated that he will appeal to the city’s Board of Standards and Appeals to avoid the rezoning.

Kalikow said on Thursday that the foundation for the 800-foot tower, dubbed Sutton 58, is 15 days away from completion. Under city law, if excavation is complete and there is “substantial progress made on the foundations,” the project likely won’t have to abide by the zoning change. However, the appeal will take several months, and Kalikow expects work won’t commence again until the spring or early summer.

“In blindly following Council member Ben Kallos, the New York City Council just put more than a hundred New Yorkers out of a job tomorrow, right before the holidays,” Kalikow said in a statement. “This shameless political move gives Council member Kallos a temporary political win so he can cater to a handful of rich constituents who do not want their million-dollar views obstructed.”

Kallos and the East River 50s Alliance (ERFA), a nonprofit group formed by a coalition of residents in the area, led the rezoning effort, arguing that the change was aimed at stopping out-of-context supertalls from encroaching on residential areas. They didn’t want a Billionaires’ Row on the East Side.

“It’s one thing to have housing that can house real New Yorkers,” Kallos said during a press conference before Thursday’s council meeting. “Billionaires building buildings for other billionaires? I think everyone’s tired of that.”

The controversy over the rezoning highlights the power of member deference in the City Council — a tradition of yielding to the whims of the local representative in land use matters. Last week, the Land Use Committee axed a grandfather clause that the City Planning Commission added to ERFA’s application, which would’ve relieved Gamma’s project from the change. Kalikow and the Real Estate Board of New York have also warned that the rezoning sets a dangerous precedent for community groups and city officials halting as-of-right development that they don’t like. It’s not clear how far reaching the decision on this project will be, but similar efforts to block supertalls on the East Side have cropped up. Council member Margaret Chin has waged a fight against a string of projects on the Lower East Side’s waterfront. During the press conference, Kallos said people should keep an eye on what happens in Chin’s district.

Efforts to Rezone Sutton Place began before Gamma owned the property. Gamma won the site in a foreclosure auction last year after its former owner, the Bauhouse Group, tried to fend off the lender with a Chapter 11 filing and a series of lawsuits. When East River 50s began its rezoning campaign, a nearly 1,000-foot tower was planned for site. The group has maintained that their application was never about just Gamma’s tower. But Kalikow has argued that residents of the Sovereign, a post-war co-op building next door, led the charge because they feared his project would block their views.

“In this case, you have, basically, a community in Sutton with one hideous monstrosity of a building, the Sovereign, complaining about contextuality,” Kalikow told The Real Deal in a previous interview. “This is quintessential NIMBY.”