The owner of Grand Central Terminal has filed a $1.1 billion lawsuit against the city and developer SL Green, claiming that the developer's forthcoming 63-story luxury tower is proceeding with total disregard to Grand Central's air rights.
The NY Times reports that developer Andrew Penson bought Grand Central for $80 million in 2006, shelling out an additional $60 per square foot for the terminal's 1.2 million square feet of airspace. The suit claims that the airspace is currently worth $880 per square foot—a payoff that Penson was banking on.
However, this spring the city council approved a rezoning proposal for the so-called Vanderbilt Corridor—a small five-block stretch between East 42nd and East 47th Streets. As part of the rezoning, SL Green got permission to build its tower on the block between 42nd and 43rd. As per the council's decision, SL Green is under no obligation to pay Penson.
SL Green's forthcoming tower, dubbed 1 Vanderbilt, will eventually rise 1,501 feet and include a bank and five floors of retail, in addition to office space.
Penson's lawsuit claims that it is a violation of the Fifth Amendment to "[take] the property of a private citizen for the benefit of another private citizen without any public purpose." However, the city has countered that SL Green was granted permission on the condition that it would fork over $220 million for improvements to Grand Central's subway platforms.
According to Penson's lawsuit, the subway improvements were a stipulation under the original zoning, and the new zoning simply waves the cost of airspace.
SL Green spokesman Jeremy Soffin says that two thirds of the $220 million will go towards "enhancing connections and circulation spaces" along the 4/5/6 line. The rest will go towards new underground connections between the subway, LIRR, and Metro North; a public plaza on Vanderbilt Avenue next to the terminal; and two new subway entrances at the base of the tower.
"This initiative, approved by the City Council, is critical to helping New York City compete as a global center of finance and business, and to improving the public transit and infrastructure used by hundreds of thousands of New Yorkers every day," said Mayoral Spokesman Wiley Norvell in a statement.
Construction of 1 Vanderbilt is scheduled to be completed by 2021, along with the subway improvements. In the meantime, some critics fear that the rezoning of the Vanderbilt Corridor will endanger historic buildings in the zone, like the Roosevelt Hotel.
