Crunch is suing one of its Manhattan landlords, who is trying to kick out the fitness chain for using space without an official OK to do so from the city.
Crunch claims that its landlord at 250 West 54th Street – Zar Property NY – is trying to evict it because Crunch is using the space as a gym — violating the legal occupancy use for the building — and doesn’t have public assembly certificate of operation. That document, issued by the Department of Buildings, certifies that an indoor space can hold 75 or more people.
Crunch filed a lawsuit in its New York County Supreme Court Thursday against the defendant listed as West 54th Street LLC, which is linked to Dario Zar and David Zar’s Zar Property NY. Crunch seeks to have the court stop Zar from evicting the gym.
Representatives for Zar did not immediately return requests for comment, and neither did Crunch nor its attorneys.
Crunch alleges that its landlord in December issued a 15-day notice to fix the issues — which Crunch says is “utterly groundless.” Crunch, which has leased its space for seven years, alleges that its lease says that the premises may be used as a “gym or health club.” And it argues that the lease spells out that violating local use ordinances doesn’t amount to a default.
Even if this provision didn’t exist, Crunch claims that it would not be in default of the lease because the premises have been used as a gym since 1997, according to the filing. Crunch also has been trying to get its necessary documentation to use space at the building and has a meeting with the DOB in February, the case says.
“While there have been delays in the process thus far, the delays are either typical in the complicated and lengthy process of obtaining signoffs and permits from the City of New York, or they have resulted from a lack of cooperation by [Zar] and issues plaguing areas of Defendant’s building that are not under Crunch’s control,” the complaint says.
Opening fitness centers in New York requires special permits and approval by the Board of Standards and Appeals, and many spaces also tend to need costly renovations to account for heavy equipment and soundproofing.
Crunch occupies part of the ground floor as well as the second and third floors of the building and its lease is up in 2024, but the agreement allows for a five-year extension option, according to the complaint. The gym says it has invested heavily in this location; this past year it upgraded its shower and locker facility, which cost $130,000, for instance. And last month, Crunch bought $111,000 worth of new equipment for this location.
The 13-story retail-and-office building, located several blocks south of Central Park, has 163,000 of rentable square feet. The company is renovating the property and plans to bring in tenants from sectors such as technology and media, according to Zar’s website.
Zar acquired the building in 2017 from Ascot Properties for about $83 million. Signature Bank provided a $58 million mortgage for the deal, property records show.