By: Lauren Roland
In late February, New York Supreme Court Justice W. Frank Perry ruled that 200 Amsterdam, a luxury condo construction project on the Upper West Side should have their construction permits revoked (Tannenhauser, 2020). The current zoning lot of the building was cobbled together through surrounding lots, which opponents of 200 Amsterdam say is abuse of the permit and zoning process.
This ruling comes as a blow to the developer of 200 Amsterdam, SJP Properties who has already completed most of the construction on the 668 foot tower (Simmons, 2020). Because Justice Perry ruled to remove the zoning and construction permits for 200 Amsterdam, this could potentially require the developer to remove half of the floors already constructed. 200 Amsterdam has been actively trying to sell units in the 52 story building. With several units on the upper floors already sold, those units face the risk of being dismantled under the ruling.
The proposed removal of around 20 floors in the building could send the developer’s loan into default (Bockmann 2020). Japanese lender, Sumitomo Mitsui Trust Bank provided SJP Properties with the $426 million dollar loan to construct the building. The 200-page loan document for the project does stipulate the building must comply with all legal and zoning requirements, as well as maintain loan to value ratio of 65 percent (Bockmann 2020). Real estate attorneys familiar with the project do not think the lender would put the loan into default immediately, as they would want the project to get on track with the current developers.
Civic organizations, such as the Municipal Arts Society were among opponents of the project from the start, maintaining that developers went around zoning regulations and “gerrymandered” the plots around the lot to maximize the height of the building (Pruznick 2020). Legal representatives for the developers deny the claim. They say the building could exist on any part of the block with current zoning laws that date back to the Robert Moses era.
Currently, there are 20 other buildings in the city that were built using partial tax lots, such as 200 Amsterdam. Legal representatives say the judge has now created trouble for these other buildings with this new ruling. If he says 200 Amsterdam is illegal, this now means the other buildings built on the same type of lots are illegal, including their certificates of occupancy and zoning lots (Pruznick 2020).
The ruling comes at a time where city citizens are taking a more active approach to what is happening in their neighborhoods. Most recently, the citizens of the upper Manhattan neighborhood, Inwood fought and won to stop a rezoning plan for the neighborhood in fear gentrification would cause displacement of longtime residents (Pruznick 2020). Citizens want a say in how their neighborhoods develop and are taking any means possible to stop rapid development from happening. The 200 Amsterdam case is no exception.
Developers for the project are expected to appeal the court’s decision regarding the zoning. The final outcome of this case will determine how the court handles other zoning projects for the city in the future. Either way, we now know that developers are not exempt from scrutiny from the courts and from city residents, which may dissuade developers from beginning large scale projects such as 200 Amsterdam to begin with.
Sources:
Bockmann, Rich (21, February 2020) Shock Ruling could throw 200 Amsterdam loan into default. Retrieved from:
https://therealdeal.com/2020/02/21/shock-ruling-could-throw-200-amsterdam-loan-into-default/
Pruznick, Matt (21, February 2020) 200 Amsterdam Ruling Threatens Havoc To New York City Development. Retrieved from: https://newyorkyimby.com/2020/02/200-amsterdam-ruling-threatens-havoc-to-new-york-city-development.html
Simmons, Shawn (19, February 2020) Court ruling against Upper West Side tower could take down 20 floors. Retrieved from:
https://archpaper.com/2020/02/court-ruling-against-200-amsterdam-could-remove-20-floors/
Tannenhauser, Carol (14, February 2020) Judge Rules Permits for 200 Amsterdam Avenue Should Be Revoked, and Building Reduced in Size. Retrieved from: