The Real Deal New York

What happens if the rich NIMBYs win?

Developers worry about precedent as projects stall in UES, EV
By Rich Bockmann | January 26, 2018 04:50PM

Rendering of Sutton 58, PS 64 at 605 East 9th Street (Credit: Google Maps)

On the surface, Gamma Real Estate’s proposed luxury condominium tower in Sutton Place and Gregg Singer’s plan to redevelop a long-shuttered public school in the East Village into a dorm have little in common.

But one trait they share is that both have been impeded by deep-pocketed NIMBYism, Singer claims. And if it’s allowed to continue, the interference could set a dire precedent for as-of-right development projects opposed by wealthy neighbors across the city, the developer believes.

“We are enormously frustrated by the political obstruction here, and if this kind of obstruction is allowed to stand, it will have ominous implications for real estate development all over the city,” Singer told The Real Deal.

After nearly 20 years of trying to redevelop the former public school he bought from the city at an auction for $3.15 million in 1999, Singer on Wednesday filed a lawsuit in federal court claiming local elected officials and neighborhood groups have conspired to block the project.

The lawsuit identifies fund manager Aaron Sosnick, who owns two condominiums in a building next to the project, as the “chief pot-stirrer” of the opposition, and names him as a defendant. Sosnick, who did not respond to requests for comment, is head of the Park Avenue-based hedge fund A.R.T. Advisors, which has $3.7 billion in assets under management.

Singer claims that the hedge funder is working to block the transformation of the shuttered building at 605 East 9th Street into a dorm because he doesn’t want his street overrun by college students, and is pulling out his checkbook to make sure that doesn’t happen.

An email Singer’s attorney acquired through a public records request shows Sosnick’s lawyer writing to his client that “part of the argument is not just about having kids running amok in the neighborhood, it is also about changing the character of the building that is part of the community.”

Sosnick bought a penthouse next door to the site in the Christadora House condo building at 143 Avenue B for a reported $960,000 in 1999, the year after Singer won his site at auction. Four years later, he bought another unit in the building for $2.25 million, public records show.

But when Singer began floating plans in 2013 to transform the building into a 500-bed dormitory, a wealthy nonprofit run by Sosnick started making donations to groups opposing the project.

Sosnick is a major contributor to and appears to be the only trustee of the nonprofit La Vida Feliz Foundation, the group’s tax filings show. In 2013 and 2015, La Vida Feliz gave a combined $2.95 million to groups that are either actively lobbying against the project or pushed for the building to be landmarked: the Greenwich Village Society for Historic Preservation, the Historic Districts Council and the New York City Landmarks Conservancy.

Greenwich Village Society executive director Andrew Berman called the lawsuit “ludicrous,” and told TRD that the GVSHP has been involved in the fight long before La Vida Feliz started making grants.

“While we’re actually quite proud of the fact that Mr. Singer has highlighted the role we play in blocking him in getting around the law and destroying this building, it’s actually a very board coalition of dozens of community groups and neighborhood activists,” he said.

Since 2004, Sosnick’s given $18,400 in political donations to elected officials and candidates, according to campaign finance records. He made the maximum donation of $2,750 to former Lower East Side Councilwoman Rosie Mendez in 2013 and her successor, Councilwoman Carlina Rivera, who served as Mendez’s legislative director prior to her election win in November.

A spokesperson for Rivera said, however, that there’s broad-based opposition to the project in the district that goes beyond Sosnick.

“Aaron has been a vocal part of the discussion at community board meetings in this fight [over the site], which has been going on for 19 years,” a representative for Rivera’s office told TRD. “It’s been almost two decades and this is not just one guy and his fight. It’s probably one of the single biggest issues that we hear about all over the district.”

In December 2016, Sosnick sent GVSHP’s Berman an email regarding Adelphi University’s plan to lease dorm space at the site. Mendez and Rivera were cc’d on the correspondence, according to Singer’s lawsuit.

“Just want to let everyone know that word is that Adelphi has already reached out to the Mayor’s Office in favor of the dorm project,” Sosnick wrote. “This emphasizes the urgency for our elected to reach out to the Mayor’s Office to, at a minimum, insure [sic] that permits aren’t issued in the dead of the holidays based on just one side’s lobbying.

“It also seems urgent to reach out to Adelphi to let them know the history of the building and what they are walking into,” he continued.

Singer, for his part, has resorted to questionable tactics to try to taint opposition to his project by highlighting Sosnick’s involvement.

A lobbying and PR firm Singer hired to work on the development paid actors to show up at a rally outside City Hall in November support the plans and accuse Sosnick of buying elected officials.

The opposition to Singer’s project in some ways resembles that faced by Gamma Real Estate in its effort to build an 800-foot-tall condo tower in Sutton Place. Wealthy neighborhood residents — mostly from one neighboring building — have successfully lobbied their local elected officials to rezone a 10-block stretch of the area limiting the scope of Gamma’s tower.

Gamma has halted work on the project as it seeks an appeal. But company president Jonathan Kalikow has said the decision would “set a horrendous precedent in New York, enabling rich folks to stop a nearby building they didn’t like,” and called it “quintessential NIMBY.”

Meanwhile, neighborhoods where residents have fewer means, have had less success in blocking developments they oppose. Not far south from Singer’s East Village project, residents of Two Bridges – many of whom live in public housing – have not been able to thwart towers luxury they oppose rising on the East River waterfront.

Council member Margaret Chin and Manhattan Borough President Gale Brewer earlier this month put forth a proposal that would force JDS Development Group, L+M Development Partners and Starrett Development to go through the city’s lengthy land-use process before they can develop handful of glassy residential towers they have planned along the river. The Department of City Planning, however, had previously rejected a similar request, citing the as-of-right nature of the developments.

The application follows the passage of related legislation in October, which allows Council members and other officials to bypass the pre-application process before submitting their own zoning text amendments. The mayor has yet to sign the bill.