150 Nassau board (grand) slams Denny’s in $10M lawsuit

UPDATED, 10:11 a.m., June 7: The condominium board of a landmarked building at 150 Nassau Street filed suit for up to $10 million yesterday to block a Denny’s restaurant from operating at the site’s commercial space. Meanwhile, the restaurant’s would-be landlord has vowed to bring it to the building.

The board, which manages operations at the historic American Tract Society Building across from City Hall, is asking a New York State Supreme Court judge to block the 24-hour restaurant from operating out of the building, amid fears that it will attract disruptive crowds and violate the structural integrity of the site with required renovations.

The owners of the commercial space, Babaev Group, a Jamaica, N.Y.-based real estate fund, agreed to lease it to Denco Enterprises, a Whittier, Calif.-based franchisee that operates 27 of the fast food restaurants around the country, according to the suit.

The 125-unit building, which was constructed in 1895 and converted to condos in 2002, is home to numerous families, who are not keen to deal with the college-age clientele that Denny’s apparently attracts in the wee hours, the suit says. A unit is currently on the market for $1.45 million, StreetEasy shows.

“In stark contrast to the dignity and storied character of this quiet, residential, family-oriented building, Denny’s is a fast food chain synonymous with a late night party atmosphere, as well as drunk, disorderly, violent and criminal conduct,” said the complaint, filed by Gabriel Levinson, a partner at Tarter, Krinsky and Drogin.

Denco Enterprises officials were not immediately available for comment.

Babaev officials said they have not yet received the complaint, but added that they expected to prevail against the condo board.

“We’ll defend it vigorously,” Meir Babaev, owner of the Babaev Group, told The Real Deal. “We’re going to have a Denny’s in the building one day.”

Construction plans were submitted to the Department of Buildings between January and March, and stated that the structural stability of the building would be affected by the planned work, according to the complaint. The DOB found that the plans were out of compliance and rejected them, the complaint says.

“Construction plans were disapproved for multiple reasons, including incomplete zoning analysis,” DOB press secretary Kelly Magee told TRD via email. “In order to obtain an approval, the applicant must submit revised paperwork in order to comply with the Building Code and Zoning Resolution.”

The franchise operator also applied to serve liquor at the restaurant, and only withdrew its application to the New York State Liquor Authority after the condo board publicly fought against it, the suit claims.

The condo board also alleged that the restaurant will block the building’s handicapped entrance, emit odors and ultimately cause the board’s insurance rates to spike.