Stubby UES Building Faces Teardown As Legal Battle Drags On

UPPER EAST SIDE, NY — Developers seem set to clear the last remaining hurdle before they begin construction on a new Upper East Side medical center — though a legal battle with the next-door landlord is still dragging on.

Developers filed plans on Thursday to demolish the modest two-story building at 202 East 77th St., formerly home to a Housing Works thrift store. The stubby structure appears to be the last building standing on a block-long site that spans Third Avenue between East 76th and 77th streets, where a Northwell Health medical center will eventually rise.

But the project has been stymied, in part because the owners of an adjacent five-story apartment building refused to give developers access to their property to install protections while they demolish the two-story building. The developer — the nonprofit University Financing Foundation — sued the next-door landlord in February over that refusal, as Patch reported at the time.

Developers said they had been working since 2019 with owners of next-door 204 East 77th St., seeking to persuade them to allow them to demolish a rear wall separating the two properties, and to install vibration monitors, overhead protections and window protections. Those talks failed when the next-door owners made "unreasonable demands," like $300,000 worth of unnecessary roof protections, developers alleged.

But the 204 landlord hit back weeks later, saying in its own court filing that it had not been offered any compensation for the loss of its rear wall.

Now, the case remains pending — but attorneys from both parties have begun indicating that they are working toward a deal.

"We write with hopeful news ... which is that our respective clients would like to make a further attempt to resolve this matter amicably and without further judicial intervention," an attorney for the next-door owners wrote in a letter to Justice W. Franc Perry, III on May 31.

Developers' latest offer includes paying a $2,500 monthly "license fee" to the next-door owners for stepping onto their property, plus thousands of dollars in other reimbursements, according to another court filing.

It was unclear if Thursday's demolition filing came because of some breakthrough in the case; attorneys for both parties did not immediately respond to requests for comment on Friday.

Plans for the new medical center date back to 2018, when developers, the University Financing Foundation, acquired the six vacant buildings that formerly lined Third Avenue between East 76th and 77th streets.

Once the site is clear, TUFF plans to partner with Northwell — the state's largest health care provider — to construct a new medical center offering outpatient care, surgeries, cancer treatment and more.

The eventual building could be as large as 278,149 square feet, Northwell said in 2018 — though plans for the project have not yet been released.

Related coverage: UES Landlord Is Stymying Next-Door Medical Center, Developer Says