Sunday, May 31, 2015

Billionaire NYC Developer & Heirs Of Now-Deceased Wealthy Real Estate Tycoon Square Off In Court Over $244/Month, 3 Bedroom Park Avenue Rental Allegedly Being Illegally Sublet For $10K/Month; Unit Said To Be Worth $9.7M In Soon-To-Be Condo-Converted Building Bought For $360M

In New York City, the New York Post reports:
  • An only-in-Manhattan $9.7 million legal battle is raging over a $244.37-a-month Park Avenue pad. Billionaire developer Harry Macklowe’s case against three siblings from the Katz real-estate family will go to trial to decide the fate of the dirt-cheap unit at 737 Park Ave.

    The siblings — Laura Goldblatt, Seth Katz and Tracy Edwards — inherited the lease on the three-bedroom pad before Macklowe bought the legendary Lenox Hill building in 2011.

    Macklowe is converting the 20-story residential tower to luxury condos — and wants to force out the siblings so he can sell their terraced pad for $9.7 million, according to their court papers. But none of the litigious heirs even lives in the city, Macklowe counters. Further, he gripes, they have been “illegally profiteering” by subletting the apartment for $10,000 a month.

    The siblings counter that they had a deal with Macklowe to let them sublet. The agreement says they control the 17th-floor unit until the last of their two surviving aunts, who also live in the building, dies, they say. The youngest is 69.

    The siblings’ grandfather, L. Katz, purchased the East 71st Street building in 1944. A few years later he gave some of the most sought-after units in the building to his family members for nominal rents.

    Earlier this week, Justice Shlomo Hagler said the “raging controversy” must be decided at trial.

    The case comes down to the question of whether the siblings have “an unfettered right to sublet their apartment at monthly rates that substantially exceed the last registered rent for the apartment . . . without the consent of the landlord.” Parties for both sides declined to comment.

    The siblings say the developer bought the marquee building for $360 million — a price that reflected known “encumbrances,” namely their long-term budget rents. Their troubles with Macklowe started after they rejected a low-ball buyout offer, according to court papers.

    That’s when Macklowe began his “campaign . . . to acquire the Katz family apartment by any means,” including by threatening to evict their subletter and by trying to re-write their sweetheart lease.

    “The tenant should not be allowed to rent out the apartment at a profit relative to his or her own rent, and thus use the apartment instead as a money-making machine,” Macklowe fumes in his 2013 suit.

    He adds that the unit was listed as rent-stabilized in the previous owner’s records and that the siblings’ major markup violates housing laws because the apartment isn’t their primary residence.

    The law also prohibits a landlord from waiving restrictions related to rent-stabilized apartments, Macklowe says, suggesting whatever deal the Katz family cites is unenforceable.

    Macklowe, whose other projects include 432 Park Ave. and 150 E. 72nd St., has also filed suit against other tenants.
Source: Billionaire developer wages war over $244-a-month pad.

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