UPDATED Dec. 15, 2021, 3:05 p.m.: After five years of legal skirmishes, Gary Barnett won the right to build the tallest tower on the Upper West Side. But the developer has one final battle, and he’s not fighting only for himself.
Barnett’s firm, Extell Development, is still pursuing a lawsuit in which it accuses a storied nonprofit of reneging on an agreement that would have spared the developer years of headaches, legal fees and carrying costs. The nonprofit, the City Club of New York, says that nothing was signed and that Extell is abusing the courts to discourage criticism of developers.
The social club was founded in 1892 by prominent builders, lawyers, financiers and railway magnates to advocate for city development with a “civic purpose.” It aimed to drive out corruption and ensure the city was developed according to its standards of architectural excellence.
For most of its 129 years, the club has been a thorn in the side of politicians and developers, including Tammany Hall and Robert Moses. Some of its more recent activities have included unsuccessfully opposing Mayor Michael Bloomberg’s East Midtown rezoning and blocking part of the redevelopment of Willets Point by Related Companies and the Wilpon family. It held up Barry Diller’s Little Island project on Pier 55 for more than a year with litigation reportedly funded by developer Douglas Durst.
City Club clashed with Extell in 2019, about two years after the developer inked a $202 million air rights deal allowing it to triple the size of a luxury condo it was planning on West 66th Street, one block from Central Park. Barnett’s 127-unit building is slated to rise 775 feet, which would make it the tallest structure in the neighborhood, and aims to generate $188 million in sales.
City Club sued to block its construction, arguing that Extell had violated zoning rules and miscalculated the proportions of the tower and podium to give it additional height. The nonprofit also filed a case with the city’s Board of Standards and Appeals.
LandmarkWest!, a neighborhood preservation group, had previously sued to stop Barnett, but its case was dismissed and its appeal denied. City Club’s case before the BSA, and its separate lawsuit against the developer, met the same fate in November 2019.
At that point, City Club had one avenue left: Within 30 days of an administrative agency ruling such as the BSA’s, a party can file an Article 78 petition asking a state judge to review it.
The nonprofit decided to try its luck, but this is where accounts diverge.
Extell alleges that the City Club agreed to file its Article 78 and then, once the deadline had passed for additional petitions, drop the case in exchange for a $300,000 settlement fee. The deal was contingent on no other party filing an Article 78. The parties hammered out a written agreement, save the signatures.
But Extell alleges that after the City Club filed its petition, it received a “favorable reception from the court” and decided to press ahead with the case.
“My clients take their commitments seriously, and they expect people with whom they deal to do the same,” Extell’s lawyer, Jason Cyrulnik, wrote in the complaint, filed in December 2019. “City Club violated the duty to negotiate in good faith.” The City Club maintains that the sides had not agreed on terms.
A judge ruled in favor of the nonprofit’s Article 78 last year, voiding Extell’s permits, but the decision was overturned on appeal in July. The City Club countersued Extell in October, claiming that the developer’s complaint against it constituted a strategic lawsuit against public participation, known by the acronym SLAPP.
“Extell, one of the most powerful real estate developers in Manhattan, wants to send a message to community organizations and everyday New Yorkers who oppose its overdevelopment of the borough: You can’t challenge us,” wrote Richard Emery, a member and lawyer representing City Club, in the anti-SLAPP complaint. “By suing City Club, it seeks to make an example out of City Club.”
Emery said in an interview that the club has just $1,000 in its bank account, so money cannot be Extell’s objective. Institutional backing for the City Club is ad hoc, he said, and there was no outside financing for its case against Extell’s project.
“The question is, What do they get out of it if they win?” Emery said of Extell and Barnett. “It appears their motivation is to destroy the City Club.”
Barnett expressed incredulity at Emery’s statement, given that the club stood to get $300,000 in their deal.
“First they sue us, then they renege on an agreement that they had with us. Now they’re complaining that they have no money,” he said. “This is totally outrageous and the height of chutzpah, which is defined as the child that kills its parents and then asks for mercy because he’s an orphan.”
“If they hadn’t sued us, they’d have plenty of money,” Barnett continued. “These are not harmless groups. They kill jobs, they cost millions of dollars and they harm the tax base for the city.” The case is now in discovery.
Emery vowed that the club would not disappear as it did in 2003, when it suspended activities before resurfacing a decade later. Emery said that if Barnett triumphs, City Club may be forced to disband, but the victory would be hollow because its roughly 30 individual members would regenerate.
“They will never give up the cause individually,” said Emery. “They will form another organization.”
LandmarkWest! has also not given up its efforts to stop the West 66th Street project. The group filed its own Article 78 petition against challenging the BSA’s decision late last year. After a judge denied the petition in May, the group appealed unsuccessfully once, then filed a second appeal last week.
For the moment, however, Extell is free to begin construction.
This article was updated with additional information regarding LandmarkWest!’s Article 78 petition.