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200 Amsterdam Ruling Threatens ‘Havoc’ To New York City Development

(approx. 3 minutes reading time....)

Developers of the Upper West Side’s tallest building, 200 Amsterdam Avenue, were dealt an unprecedented blow last week when a State Supreme Court Judge ruled that 20 or more floors may have to be lopped from the residential skyscraper. Developers SJP Properties and Mitsui Fudosan America are in the process of appealing the decision, which is the latest in a string of community-led attacks on development throughout the city.

While other recent injunctions have prevented projects from breaking ground, this edict comes after the 52-story building had already topped out and work was heading for completion.

“This ruling sets a dangerous precedent for the future of development in this city,” said Steven Pozycki, founder, chairman, and CEO of SJP Properties. “It will send a message to investors that the administration of land use controls in New York City can be upended, and substantial investments can be wiped out, by even a single individual who is unhappy with the building permitted by those controls.”

Opponents of the project, led by civic organizations including the Municipal Arts Society (MAS), contend that the developers skirted regulations by using a “gerrymandered” 39-sided plot in order to maximize the height of the 668-foot-tall tower.

“We’re concerned that this technique of assembling zoning lots in this way would be used in other cases across the city and set a very dangerous precedent for the creation of unpredictable developments,” said Elizabeth Goldstein, president of the MAS. “The development is out of scale for what a reasonable citizen would expect to happen in that community based on the zoning resolution and the application of straightforward principles.”

Legal representatives for the development team disagree on all grounds. “The reality is that there’s nothing nefarious about it,” said Paul Selver, partner at Kramer Levin, which is representing the developers. “If the whole block was one zoning lot, you could still build the exact same building. The gerrymandering didn’t create this building; the fact that you have a superblock created the ability to build this building. And that superblock goes back to Robert Moses times.”

According to Selver, the origins of the oddly shaped lot go back to 1987, when then-owners of the neighboring Lincoln Towers complex pieced together plots of vacant land for the purpose of development, including portions of existing tax lots. In 2007, this zoning lot was merged with other tax lots to form a larger zoning lot that included the 200 Amsterdam parcel.

“That’s the issue: whether or not you can have a zoning lot that’s composed of portions of tax lots, or whether you can only have a zoning lot that’s composed of core tax lots,” Selver said. And, according to Selver, history sides with the former. “It’s not that common, but it’s established,” he said, pointing to Park Avenue’s MetLife Building (formerly Pan Am) as the most prominent example of a project constructed in this way.

In total, 20 other buildings around the city have been built using partial tax lots. In addition to containing almost 2,300 apartments, the buildings are burdened by hundreds of millions of dollars in mortgage loans. “The judge has put the city in a little bit of a pickle here,” Selver said. “[His ruling] technically means that those certificates of occupancy are illegal, because the zoning lots on which they’re based are not legal.”

In fact, three of these buildings—200 West End Avenue, 180 Amsterdam Avenue, and 160 Amsterdam Avenue—were built right next to 200 Amsterdam on the gerrymandered lot, with work concluding as recently as 2013. “You didn’t hear anybody say a peep,” Selver said. “There was not a sound raised about gerrymandered zoning lots when people were building those buildings.”

Indeed, Selver said that the Department of Buildings’ (DOB) decision to grant 200 Amsterdam’s developers a permit was consistent with the way it has interpreted zoning laws for 40 years. Further, the DOB’s determination was upheld by the Board of Standards and Appeals following a two-year period of document review and testimony. It was against this backdrop that SJP proceeded with its $325 million investment in the project; the team wasn’t “building at their own peril,” as Richard D. Emery, a legal counsel for an opposing community group, opined to the New York Times.

“[Over the last] 40 years, you have 34 DOB decisions that are made consistent with allowing partial tax lots to be part of zoning lots, and no decisions—literally no decisions—being made that say you can’t have a partial tax lot as part of a zoning lot,” Selver said. “If there was a reason to be concerned here, you would have expected that somebody would have said ‘Wait a minute, no, you can’t do this.’ But the Buildings Department, each time it conducted a thorough plan review, said on 34 separate occasions that you can do this.”

The ruling on 200 Amsterdam comes on the heels of two other legal decisions to block major developments in Manhattan. In August of 2019, another State Supreme Court judge overruled the approval of the Two Bridges megaproject on the Lower East Side, which includes Extell’s completed One Manhattan Square. Three more condominium towers, including one supertall, were set to follow, but now the developers must go through a protracted citizens’ review process.

Then, in December of last year, a Manhattan Supreme Court Judge struck down a plan to rezone a 59-block stretch of Inwood that had been approved by the City Council in 2018. Opponents of these developments on opposite ends of the island cited fears of gentrification that would threaten the affordability of the neighborhoods for longstanding residents, despite the fact that the Inwood plan called for the creation of 1,600 affordable homes.

“What we’re concerned about is that communities, and the city for that matter, are able to understand what might happen under the zoning resolution in any particular neighborhood,” MAS’s Goldstein said.

Developers are fearful that rulings like these and the one facing 200 Amsterdam could lead to long-term economic consequences that extend far beyond the community level. “This ruling has created uncertainty and alarm for all New York City developers, and we may well start to see investors and developers shifting their focus away from New York and choosing to focus on other cities—with the obviously detrimental impact on local jobs, housing costs, public services, and taxes,” SJP’s Pozycki said.

However, Selver has faith in the appeal process, and believes that 200 Amsterdam will eventually get back on track. “Notwithstanding this ruling, we have a lot of confidence in our client’s position,” he said. “It is grossly unfair and unreasonable to apply this decision retroactively and it’s going to create some measure of havoc in the city, quite frankly, if it sticks.”

by Matt Pruznick

(reprinted with permission from New York Yimby. Original article here.)

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