X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

NEW YORK CITY-The Metropolitan Transportation Authority will have to pay a total of $141.7 million to three Downtown landowners whose parcels were seized for phase two of the MTA’s Fulton Street Transit Center, a New York judge has ruled. Justice Walter Tolub of the New York State Supreme Court agreed with the landowners’ contention that the properties should be valued as an assemblage rather than as individual parcels, thereby making them worth about $40 million more than the MTA’s valuation. An MTA spokesman tells GlobeSt.com the transit agency plans to appeal.

“The highest, best and most profitable use of the properties would have resulted in the construction of residential rental and condominium development, with ground and second floor retail development,” Tolub wrote in his August 28 ruling. Given that, “there is simply no question” that the three northernmost parcels along lower Broadway between Fulton and John streets “would have constituted an assemblage, and that the parties would have entered into a zoning lot merger, transferring the development rights. These lots were, for all intents and purposes, under common ownership and control.”

That common ownership of the four properties on these parcels came from the Reformed Protestant Church of the City of New York, the fee owners of 192, 198 and 204-210 Broadway; and from Brookfield Properties, which entered into a joint venture with the church on ownership of 200 Broadway. Brookfield and the church had discussed an assemblage of these parcels well before the MTA’s eminent domain seizure of the properties in March 2006, Tolub wrote. All have since been demolished.

According to Tolub’s ruling, the church had also been in active negotiations with the Riese Organization, which owned 194 Broadway, for developmental rights prior to the MTA’s taking the property. Based on comparable sales that took place in early 2006, Tolub ordered the MTA to pay the Rieses $35.2 million for 194 Broadway, and to pay the church and Brookfield a total of $106.5 million for the four other properties.

An MTA spokesman tells GlobeSt.com that the agency “disagrees with the court’s valuation of property required by the MTA to complete the Fulton Street Transit Center and intends to appeal the decision.” He adds, “The project’s budget and the proposed 2010-2014 capital program include reserves for contingencies, which, if necessary, would cover these increased valuation costs.” MTA attorneys had argued in court that the landowners had been unable to reach an agreement on the sale of air rights and that the concept of the properties as an assemblage was an afterthought.

In a release, Warren A. Estis, founding partner of law firm Rosenberg & Estis and lead counsel for the Riese Organization, says that because the court’s award was “substantially in excess of the MTA’s valuation, we plan to seek to recover from the MTA Riese’s attorney’s fees and other expenses.” A Brookfield spokeswoman tells GlobeSt.com the company has no comment.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.