This month in real estate history

A look back at some of New York City's biggest real estate stories

May.May 01, 2013 07:00 AM

Former Chief Justice Warren Burger

1970: Court rules in favor of church tax exemptions

The U.S. Supreme Court ruled 43 years ago this month that religious organizations were exempt from paying state property taxes. The landmark case rejected a lawsuit filed by a New York property owner who claimed that the state law exempting religious organizations from paying into the public coffers was unfair to other owners.

The case came before the nation’s highest court after Bronx attorney Frederick Walz purchased a 638-square-foot parcel of land overrun by weeds in Staten Island in 1967. Walz quickly filed suit against the City Tax Commission over the $5.24 annual tax bill on the land, which was worth $100.

In his objection, Walz claimed the religious exemption drove up his property tax bill and indirectly forced him to subsidize religious organizations. He also argued that allowing the groups to not pay taxes ran counter to the First Amendment’s prohibition on creating a law “respecting an establishment of religion.”

The property owned by religious organizations in New York City at the time was valued at approximately $692 million, which would have generated $36 million annually in property taxes. The 7-to-1 ruling by the nation’s highest court, which was led by Chief Justice Warren Burger, found that the state law did not violate the Constitution’s so-called establishment clause.

1939: Tiffany’s moves to upper Fifth Avenue

In a decision exemplifying the continued uptown march by luxury retailers on Fifth Avenue, famed jewelry store Tiffany & Company announced a deal to relocate 20 blocks north to 727 Fifth Avenue at 57th Street, 74 years ago this month.

At the time, Tiffany’s was located at 401 Fifth Avenue, at 37th Street, an area that was losing its influence as a shopping district.

When Tiffany’s opted to build its McKim, Mead & White–designed building at 401 Fifth Avenue, which it had called home since 1905, the area was a teeming shopping strip (see below item). But with the center of the city’s high-end shopping district shifting north, the company opted for a location in the heart of the swanky retail action.

“The move provides a significant touch of stability to the street, which has become known as America’s Rue de la Paix,” the New York Times wrote at the time, referring to the famed Paris thoroughfare. The jewelry store moved into its newly constructed eight-story building in October 1940.

1909: Record sale price for future Lord & Taylor home

Two brothers paid a record price for a corner lot on Fifth Avenue that ultimately created one of the largest store frontages on a newly booming section of Fifth Avenue for Lord & Taylor’s flagship department store.

Frank and John Burton paid approximately $950,000, or $265 per square foot — a Fifth Avenue record at the time — for the northwest corner at 38th Street. The purchase gave the Burtons control of about 148 feet along the avenue, enough to attract the large retail tenant.

“If you’ve ever bagged anything after gunning for it for 12 years I think you have a fair idea of how we feel,” John told a New York Times reporter at the time.

The brothers were not the first in their family to own this prime piece of Fifth Avenue.

Their father owned the entire block front along Fifth between 38th and 39th streets, but sold most of it off in pieces in the mid-1800s, including this parcel for $47,000.

At the turn of the century, Fifth Avenue just north of 34th Street was a trendy spot with specialty and department stores like Tiffany & Company and B. Altman & Company moving in.

In 1912, Lord & Taylor signed a 21-year, $500,000-a-year-lease with the Burtons in order to relocate from its Broadway and 20th Street location, which it was outgrowing. In 1914, Lord & Taylor moved into the 10-story building at 424 Fifth Avenue, which it still occupies.

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