The Daily Dirt: The controversy around this High Line luxury project involves cab drivers, strip club owners, FBI agents and more

TRD New York /
Aug.August 30, 2019 12:15 PM
Israeli financier Jonathan Leitersdorf had big plans for a prime High Line site — but taxi drivers, tenant-harassing strip club owners, and a retired FBI agent have turned the project into an absolute circus.

Israeli financier Jonathan Leitersdorf had big plans for a prime High Line site — but taxi drivers, tenant-harassing strip club owners, and a retired FBI agent have turned the project into an absolute circus.

Stop me if you’ve heard this one before: Some cab drivers, some strip clubs owners and an FBI agent walk into a High Line luxury project…

A project at 11th Avenue and 23rd Street has been delayed for seven years, and the reasons center on the most colorful cast of characters this side of a Mel Brooks movie.

A partnership led by Israeli financier Jonathan Leitersdorf owns the leasehold on the rent-stabilized hotel property and has long been trying to develop the site into a luxury building featuring a five-story penthouse, an art museum and a private gallery called SkyBox. But he has faced obstacles including cab driver Joe Stevens, who has been living at the hotel since 1996, and New Yorkers Hamidou Guira and Oltimdje Ouattara, who checked into the hotel in 2015 and became permanent tenants thanks to an obscure SRO law.

Former FBI agent Gurdayal Kohly owns the land and also has a rough relationship with Leitersdorf thanks to rent disputed and uncleared building violations. SkyBox sued Kohly in June, accusing him of having second thoughts and trying to terminate the lease.

This is just a fraction of the labyrinthine legal battles and complications the project has faced, and Real Deal reporter Kevin Sun said he had to leave out a few other bizarre subplots to keep the story at a manageable length, such as the one about the poltergeist in the third-floor bathroom and the one about the remains of Amelia Earhart showing up on the roof (OK, I made both of those up) (as far as I know). So you’re probably better off reading the full story here — or maybe waiting for HBO to turn the whole saga into a miniseries.

For some WeWork landlords, ignorance is bliss.

WeWork’s recent IPO filing was not exactly the most comforting thing for some of its landlords to read, to the point where a few wish they had never read the document at all.

“There were certain things in that report I would rather not have seen,” Rory Greenberg, who owns a WeWork building in Miami, told TRD reporter David Jeans. “Obviously, I’m sure a lot of it can be explained.” (For what it’s worth, Greenberg said he “loves” the business model and remains a WeWork fan.)

The co-working giant’s S-1 filing with the U.S. Securities and Exchange Commission raised questions about issues ranging from its business practices to its lack of corporate governance to the scale of its outstanding lease commitments. Landlords had various reactions to it, ranging from anxiety to somewhat reluctant acceptance to optimism that the company’s IPO will provide them better collateral from WeWork than they currently get.

Ultimately, the experience landlords had reading WeWork’s IPO filing seems pretty similar to the experience most high school students have with their summer reading lists: They may not have been too happy about what was in it, but it did teach them some things they’re probably better off knowing.

What we’re thinking about next:

What’s next for Gary Barnett’s massive One Manhattan Square project after it landed a $690 million refinancing package from Blackstone Group? And will anyone who lives there ever actually end up paying common charges? Send thoughts to [email protected].

Residential: The priciest residential closing recorded on Thursday was for a condo unit at 21 East 12th Street, at about $8.7 million.
Commercial: The most expensive commercial closing of the day was for 890-938 Garrison Avenue in the Bronx, at about $64.6 million.

The largest new building filing of the day was for a roughly 24,000-square-foot residential building at 1730 Ocean Avenue in Midwood. Eddie Yair filed the permit application. 

The priciest residential listing to hit the market on Thursday was for a condo unit at 219 East 44th Street in Turtle Bay, at $15.8 million. Douglas Elliman’s Aaron Ross has the listing.  — Research by Mary Diduch

A thing we’ve learned…

People buy houses for all sorts of reasons: as places to live, as investments…well, those are pretty much the only two reasons, actually. But Creative Artists Agency co-founder Michael Ovitz once bought a house for a different purpose: spite. That’s the best kind! In the 1990s, Ovitz and his former partner Ronald Meyer were fighting over Ovitz’s move to Universal Studios, and Ovitz decided to express his anger in the traditionally healthy way of buying a megamansion in Malibu that he knew Meyer wanted. This just proves once again that the most powerful force in all of real estate is one guy being mad at another guy.

Top stories from our other markets:


Realogy is the biggest brokerage conglomerate in the country. And its stock is now worth under $5. Shares were down nearly 22 percent since the market opened after Realogy announced changes to a military referral program that will impact its 2020 earnings. Realogy shareholders have experienced a wild ride in recent months as investors react to the company’s efforts to stabilize its business, which has suffered in the face of competition, particularly from Compass.


Peppercorn Capital is looking to unload a West Loop development site air rights included as it invests in a neighboring area located in a federal Opportunity Zone. The Chicago investor has listed its 20,000-square-foot property and surrounding air rights for $10 million. Peppercorn plans to invest the profits from a sale into developing vacant land it owns at Kinzie Industrial Corridor.


Prolific Los Angeles investor and developer Onni Group is planning an 857-key hotel with a retail component in Glendale. The Canadian firm, which in June was approved to build a 60-story residential tower in Downtown, will add to the thousands of new hotel rooms scheduled to come online in the L.A. area in the next few years. The proposed hotel project will have two buildings and include 7,500 square feet of retail space.


Sunny Isles Beach has given preliminary approval to a moratorium on real estate development in an area with low- and mid-rise buildings on the west side of Collins Avenue. The ban includes an across from a high-rise row of oceanfront condo towers. The one-year moratorium is the latest phase of a controversial political response to alleged flaws in the city’s comprehensive land-use plan.

Related Articles

Nooklyn CEO Harley Courts (Credit: iStock)

The Daily Dirt: Changes to rent law raise concerns at Nooklyn

Morningside Heights (Credit: Wikipedia)

The Daily Dirt: Who needs City Hall?

Across the country, tenant campaigns promoting rent caps just cause eviction legislation are gaining momentum. Presidential candidate Bernie Sanders has unveiled his own proposal for nationwide rent control. Illustration by Paul Dilakian

How the rent control debate is heating up

Pam Liebman (Illustration by Chari Tsevis)

The Daily Dirt: Inside the Corcoran “hack”

Amazon CEO Jeff Bezos (Credit: Getty Images, iStock)

The Daily Dirt: Amazon pushes further into brick-and-mortar space

WeWork co-CEO Artie Minson (Credit: Getty Images)

The Daily Dirt: WeWork isn’t going public (for now)

Facebook CEO Mark Zuckerberg and a rendering of the Farley Post Office building redevelopment (Credit: Getty Images, SOM)

The Daily Dirt: Big tech’s west side lovefest

Extell Development chairman Gary Barnett and One Manhattan Square (Credit: Anuja Shakya, StreetEasy)

The Daily Dirt: Extell offers rent-to-buy program. Yep, you read that right.