Extell Diamond District Hotel to Brick Up Neighbor’s Windows

After breaking ground on a new 534-key hotel in the Diamond District, Gary Barnett’s Extell Development wants help from law enforcement so it can keep building.

The developer asked for a sheriff to accompany its workers as they remove air conditioners that protrude onto Extell’s property from the east-facing windows of 29 West 47th Street, owned by Jack Elo’s eponymous company, according to court filings. For its trouble, Extell also wants Elo to fork over more than $3 million.

The dispute is not really about the air conditioners. It’s about Elo losing the windows they’re in.

Extell’s 33-story hotel at 32 West 48th Street will rise along the lot line shared with 29 West 47th Street. The 225,000-square-foot hotel will connect the Diamond District to Rockefeller Center via a lobby with access to West 47th Street and West 48th Street.

Who controls the land beneath the air conditioning units has been the subject of years of litigation, as Extell has sought access to Elo’s property to build its hotel. If Extell builds to the lot line, as plans submitted to the Department of Buildings indicate, 10 stories of Elo’s windows would be bricked up.

Losing so-called lot line windows is a well-known risk to property buyers in New York: The residents of a building say goodbye to the views, sunlight and fresh air those windows provide.

“Lot line windows are fine until you have to brick them up,” said land use consultant George Janes, who examined a photo of the building at 29 West 47th Street.

Lack or loss of sunlight decreases a property’s value, a fact which Extell has acknowledged as the reason that the Elo Organization has denied access to its building for years.

Extell’s hotel will rise on West 47th Street with a series of setbacks that, like those on Elo’s 29 West 47th Street, are required by Midtown zoning to provide the street with sunlight.

But no similar zoning protects Elo’s building from the west.

Elo took a risk putting in lot line windows, given that they may later have to be filled in, which is an additional expense. But windows can bring extra revenue for many years if no one builds next door.

Owners who want to make those views permanent often try to cut a deal with the owner of the adjacent property.

“It’s a cost-benefit analysis,” said Janes. “You can brick them up now or you can brick them up from the start. However, you can protect them if you want through an easement.” If Elo made Barnett such an offer, it was not accepted. Attorneys for Extell and Elo did not reply to a request for comment.

Last October, a state Supreme Court ruling affirming a prior Appellate Court decision gave Extell its clearest victory yet. Two months later, the developer secured $220 million in construction financing. But the Elo Organization’s air conditioners remain in the way.

Elo owns at least five properties in the Diamond District, including 48 West 48th Street, four doors down from the planned 48th Street entrance to Extell’s hotel, and 15 West 47th Street, which it bought from the Chetrit family in 2020 for $110 million. Elo also bought 29 West 47th Street in 2007 for $37 million. Most of its tenants are jewelry sellers.

Extell’s Barnett is also no stranger to 47th Street. He began his career in the diamond industry, and eventually branched out into real estate, rebranding his “Diamond Heritage Properties” as “Extell”.

Extell bought the property for its hotel assemblage at a premium price just prior to the 2008 Financial Crisis, according to land and air rights expert Duane Burress. The developer had planned a residential condominium but changed the plans to a hotel in 2020, in time to avoid a 2021 law which requires special permits for new hotels.

A decade ago, Extell built the nearly 500,000-square-foot International Gem Tower at 50 West 47th Street, calling it New York’s only commercial condominium building for the jewelry trade.

Soon, visitors to the Diamond District will have a new place to rest their head, too — without any neighbors peering in.