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Developer files $100m lawsuit against the city.

A New York City developer is seeking over $100 million in damages from the city, accusing Mayor Bloomberg of putting reelection efforts before his right to develop a public school on the Lower East Side.

In a lawsuit filed at the New York Supreme Court on May 15, Gregg Singer alleges that Mayor Bloomberg used the Department of Buildings, the Board of Standards and Appeals and the Landmarks Preservation Commission to violate his right to due process and for "tortious interference" in his attempts to develop the former PS 64, a 135,000 s/f site at 605, East 9th Street.

Singer bought the building at an auction in 1998, against the objections of community activists, for $3.15 million, with a deed restriction confining any development to community facility use.

At the time, the building was occupied by CHARAS/EL Bohio, a community cultural center, which had a close relationship to then Democratic Councilwoman for the area, Margarita Lopez, who had voiced her opinion in favor of converting the decommissioned school into a community center.

Singer said that he intended to convert the space into low-income housing. However, he alleges that, after hearing of his plans, Lopez approached interested parties, threatening to remove all city and state funding from any non-profit organization that occupied the building.

Lopez, who was appointed to the board of the New York City Housing Authority in April, 2006, did not return calls for comment.

In the face of such determined opposition, in 2003 Singer changed direction and focused instead on developing the site into dormitory and approached a number of institutions, including New York University, who at the time, he said, expressed interest in the space.

Singer said that during 2004 he met with Robert Tierney, chairman of the Landmarks Preservation Commission and with representatives of the Mayor's office, who Singer said approved of his plans to erect a 19-story dorm.

Come 2005, however, with the mayoral elections pending, Singer charges that attracting the Hispanic vote took priority for Mayor Bloomberg's office, and at the request of Lopez, representatives for the Mayor's office convinced interested universities against occupying the building.

In the lawsuit, Singer claims that Cheryl Mills, senior vice president of NYU, was among those asked by City Hall "not to get involved," although in a written statement, John Beckman, a spokesman for NYU denied that the university had ever shown interest.

"We have said this to Mr. Singer, and said this publicly, again and again. It is puzzling why this is not crystal clear by now," he wrote.

On October 13, 2005 Lopez publicly endorsed Mayor Bloomberg and, three days later, the BSA rejected Singer's request for a building permit, citing his inability to come up with a sponsor. On October 18, the Landmarks Preservation Commission calendared the site for hearings.

Since then, the LPC has held two hearings, most recently on Tuesday, but have yet to make a final decision on whether to landmark or not. The next hearing is scheduled for Tuesday, June 20.

Gabriel Taussig, chief of the administrative law division of the New York City Law Department, rejected Singer's suit as without merit.

"In the context of a dorm, he needs to show some affiliation with an institution with an educational institution and he has not done that," he said.

In a written statement, Diane Jackier, director of external affairs for the LPC, described the school, which was closed by the Board of Education in the late 1970s, as "... significant for its architecture and history" and that it represents a noteworthy example of the work of architect C.B.J. Snyder, adding that PS 64 is "... an unusually intact example of a school building retaining its original fence and sculptural seals."

When asked whether he should have considered the threat of future land-marking disrupting development, Singer said when the city sells property "there is an implied good faith that you can use and develop the property as they sold it to you."

However, Joshua Stein, immediate past chair of the real property law section of the New York State Bar Association, said that buying from one city agency doesn't protect developers from the possibility of landmarking.

"If you buy from the city, you have the same risk as any private land owner that you might be landmarked, buying property from one city agency does not stop another city agency like the Landmark Commission from stepping in and stopping development.

"You could put into your contract that you don't have to close until you get a building permit and once you get a building permit that is how you get rid of the landmark risk. But I cannot imagine that the city would ever agree to that particularly within the context of an auction," he said.
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Author:Flynn, Gerard
Publication:Real Estate Weekly
Geographic Code:1U2NY
Date:Jun 14, 2006
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