A New York judge on Thursday ordered that Chrysler Building tenants pay their rent to Cooper Union instead of the real estate company that owns the leasehold — and told the firm’s mogul Aby Rosen to butt out of Cooper Union’s management of the tower.
The injunction is a stinging setback to Rosen — who sued the venerable college, which owns the land under the iconic Art-Deco skyscraper — following Cooper Union’s move to evict his company RFR on Sept. 27.
Rosen has fought the eviction order furiously, claiming that Cooper Union didn’t follow proper procedure in issuing the eviction notice. That case, which includes the school’s demand that Rosen pay $21 million in back rent, is pending before the same Manhattan Supreme Court judge, Jennifer Schechter.
But Schechter seemed unimpressed with Rosen’s argument that the eviction notice was flawed, calling his defense “flimsy.”
“The court clearly agreed that we were in our rights to terminate the lease,” Cooper Union VP John Ruth said.
“Mr. Rosen and his partners had presented not one viable defense to the termination of the ground lease. The court also noted as undisputed the fact” that Rosen and his partners were $21 million in arrears.
RFR bought the long-term leasehold on the tower in partnership with Austrian real estate company Signa in 2018 for $151 million.
The price for the 1 million square-foot landmark was low because it’s subject to the ground lease, which rose from $7.75 million in 2018 to $31.5 million this year, and will soar to $41 million in 2028.”
Rosen tried to renegotiate the lease terms with Cooper Union, but talks were hampered when Signa became insolvent last November — leading to the bitter standoff where the school and Rosen each told office and retail tenants to pay rent to them and not to the other.
The developer sued the school for $100 million in damages and claimed his failure to pay ground rent was due in part to office tenants leaving the Chrysler Building over Cooper Union’s alleged failure to curb harassment of Jewish students by a “mob” following the Oct. 7 terrorist attack on Israel by Hamas.
Rosen didn’t name any of the supposedly fleeing tenants. The tower is about 60% leased.
The judge said a landlord’s actions at any other property had no bearing on a tenant’s obligation to pay rent.
An RFR spokesperson called the firm’s removal from the building “temporary.”
The rep said RFR’s management, which included spearheading a “multi-hundred-million-dollar restoration,” was “exemlary” and that “losing RFR’s leadership risks not only the building’s financial stability but also its place in the heart of New York’s heritage and urban identity.”
It wasn’t immediately clear whether Rosen would appeal the ruling.
Leave a Reply