“There will be no return”: Tower won’t give back air rights

German investor tires of paying rent after 55 years; owner seeks $75M for "flagrant theft"

New York /
Mar.March 15, 2022 08:45 AM

950 Third Avenue (950 Third Avenue)

Squatters’ rights inhabit that part of New York lore that includes finding treasures left on the curb and Bill Murray crashing parties.  It’s about the improbable dream coming true.

The tale of 950 Third Avenue is giving hope to the believers.

The owners of the Midtown office building are refusing to return a roughly 78,000-square-foot block of air rights leased for a modest price 55 years ago.

The lease is up in three years. But the rights are no longer air; they are the upper floors of the 32-story tower. And 950 Third Avenue’s owner has essentially told her neighbor, “Try to take them back.”

“It is not possible to reverse the transfer of air rights, therefore there will be no return,” Naomi Altholz wrote in a January email to Charles Catinella, CFO of JAB USA, which sued last week seeking $75 million for the rights. Altholz is leasing them for about $122,000 a year, according to JAB’s lawsuit.

The drama dates back to the late 1960s when JAB’s predecessor, the owner of 155 East 56th Street, leased air rights to the developer of 950 Third Avenue until 2025, with options to renew for three 25-year terms.

The rent, which started at $33,000 per year, would reset in 2025 and figures to increase substantially. Altholz’s company told JAB in October 2021 that it planned not to renew the lease, and asked to pay off the remainder of the term. It did not offer to tear down the floors that were using the rights.

The German-born Altholz is the wife of Frankfurt developer Andre Altholz and the sister of prominent Manhattan landlord Axel Stawski, who sold his sibling 950 Third Avenue in 2010 for $74 million.

Altholz wrote a letter in German to JAB saying that renewing was “out of the question.” JAB called the move a “flagrant theft” and asked the court to award $75 million.

Altholz and a representative for JAB did not respond to requests for comment.

Returning air rights would, in theory, require an owner to lop off the portion of a building constructed with the rights. Developer Sharif El Gamal once threatened to do that to his own project.

In the midst of a foreclosure battle with his lender at 45 Park Place, he warned in 2020 that he would recall air rights that his cultural center had leased to the Tribeca condo tower. The project later ran into other legal problems. The foreclosure case is ongoing.





    Related Articles

    arrow_forward_ios
    Extell's Gary Barnett, Robert Gans and an aerial of 616 11th Avenue (Robert’s Steakhouse, Google Maps)
    Investor Robert Gans files for bankruptcy to thwart Barnett, Eli Tabak
    Investor Robert Gans files for bankruptcy to thwart Barnett, Eli Tabak
    Accurate CEO Jack Klugmann and the Fairfield, CT Metro North train station (Accurate, Robert Mortell/via Wikimedia Commons, iStock)
    NJ developer buys languishing project in Fairfield
    NJ developer buys languishing project in Fairfield
    Kohl's CEO Michell Glass (Kohl's, iStock)
    Kohl’s looking to cash in on $8B real estate portfolio
    Kohl’s looking to cash in on $8B real estate portfolio
    Sackman Enterprises president Carter Sackman and 15-19 West 96th Street (Sackman Enterprises, Google Maps, iStock)
    Fed up Chabad sues Sackman over unfinished condo
    Fed up Chabad sues Sackman over unfinished condo
    A photo illustration of Times Square (iStock)
    Retail asking rents show signs of recovery
    Retail asking rents show signs of recovery
    SL Green's Harrison Sitomer and 450 Park Avenue (SL Green, Taconic Partners)
    SL Green closes on Park Avenue office tower
    SL Green closes on Park Avenue office tower
    240 Sullivan Street and Sky Management’s Jonathan Ohebshalom (Sky Management, Google Maps, iStock)
    Sky buys Greenwich Village mixed-use building in quiet week for i-sales
    Sky buys Greenwich Village mixed-use building in quiet week for i-sales
    Marble Collegiate Church, HFZ's Ziel Feldman and Vanbarton’s Gary Tischler (Getty, iStock)
    Church seeks to escape hellish partnership with HFZ
    Church seeks to escape hellish partnership with HFZ
    arrow_forward_ios

    The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

    Loading...