Lone Upper East Side Tenant Defeated By Extell In Quest For New Tower

UPPER EAST SIDE, NY — The developer Extell defeated a rent-stabilized tenant — who has held up the construction of a block-sized Upper East Side tower for more than a year — in a new court ruling that lawyers fear creates a troubling precedent for thousands of tenants citywide.

The Sept. 27 ruling went against the tenant, Greg Marshall, who is the last remaining resident of his walk-up building on the corner of East 86th Street and First Avenue. Extell has spent years buying and demolishing the block's other low-rise tenements, leaving only Marshall's building and another midblock building owned by two holdout landlords.

After Extell sued Marshall in an attempt to get him out, Marshall won an initial court decision last fall — and Extell soon filed plans for a 22-story tower that would cut awkwardly around his home and the other holdout building.

But Extell appealed, and last month's decision by the State Supreme Court's Appellate Division found that the company could refuse to renew Marshall's lease in order to demolish the building.

Marshall, 45, told Patch he has lived in the building for 22 years — though his life has lately been taken over by the legal battle, ever since Extell bought his six-story building in 2014.

"It's been about seven years of this," Marshall said last week.

"A Terrible Decision For Tenants"

Marshall had been allowed to stay in his home thanks to a 2021 order by the state agency handling rent stabilization, which ruled that Extell had not proven a "good faith" intent to demolish the building nor a financial ability to build something new on the site. A State Supreme Court Justice largely agreed, ruling last November that Extell had not shown a financial ability to carry out the project.

The new ruling reverses that, pointing to a 2000 amendment to the state's Rent Stabilization Code that removes any requirement that developers show what they plan to construct after demolishing a building.

"Long-range, it's a terrible decision for tenants," said Fred Seeman, an attorney for Marshall, who fears the ruling could allow landlords to tear down buildings then let sites sit vacant.

James B. Fishman, a fellow tenant attorney, said that the amendment at the center of the new ruling was made during the landlord-friendly administration of Republican Gov. George Pataki. Though it has been on the books for more than 20 years, state laws have not changed to conform with the administrative code, so the amendment has had little effect on tenants, Fishman said.

"Even after those words were taken out of the code, [the state] continued to require good faith to not only demolish but to have funds segregated and to have the ability to construct a new building," Fishman told Patch.

The new ruling, however, may bring state laws more in line with the landlord-friendly code. Now, Fishman fears that landlords could use a phony demolition plan to evict rent-stabilized tenants, only to leave the building standing and flip it to another buyer at a higher price — thanks to the lack of stabilized renters.

That would erase some of the gains made by tenants since 2019, when state lawmakers removed landlords' ability to deregulate a rent-stabilized apartment once it became vacant, Fishman said.

"There are potentially thousands and thousands of New York City rent-stabilized tenants who are now at risk," he said.

"I've Been Here For A Long Time"

For now, Marshall has no immediate need to vacate his apartment, for which he paid $1,851.71 per month in rent as of 2019, according to court filings.

Seeman, his lawyer, said he plans to appeal the Sept. 27 ruling to the Court of Appeals, New York's highest court, though it remains to be seen whether the court will hear the case.

Even if Extell prevails and demolishes Marshall's building, its future development may still need to work around the other remaining building: the midblock walkup at 1645 First Ave., whose owners — the infamous landlords Stuart and Jay Podolsky — have refused to sell, according to a report last year by The Real Deal.

The plans that Extell filed last year call for a 543-unit apartment building, spanning the entire block of First Avenue between East 85th and 86th streets — wrapping around the sites of Marshall's building and the Podolskys' property. (Extell's chairman told the New York Times last year that he was considering building a school, though the official plans made no mention of that.)

Extell, a megadeveloper known for kicking off the "Billionaire's Row" of skyscrapers in Midtown, did not respond to a request for comment on the new ruling.

Marshall, for his part, remains in limbo. He told Patch Monday that his heat has stopped working, and his attorneys have previously accused Extell of harassing him by refusing to pay his building's utility bills — resulting in a loss of cooking gas.

Still, he hopes to stay in his apartment, which he called "comfortable and quiet, despite construction."

Said Marshall, "I’ve been here for a long time."

Previous coverage:

• New UES Tower Will Build Around Holdout Residents, Plans Show
  
• Lone Tenant Battles Extell Over Upper East Side Development
• Infamous UES Landlords Stymie Extell's Next Development: Report
• More Demolitions Coming To Vacant UES Block As Development Looms
• Three More Buildings On Vacant UES Block To Be Demolished

Have an Upper East Side news tip? Contact reporter Nick Garber at nick.garber@patch.com.