New York Times Skyscraper That Would Soar Over Sutton Place Runs Into Neighborhood Opposition by Charles V. Bagli

New York Times
New York Times
Skyscraper That Would Soar Over Sutton Place Runs Into Neighborhood Opposition
Charles V. Bagli
08/19/2015
Herndon Werth met with several lawyers last week in a restaurant around the corner from his home of over 40 years, on a sleepy stretch of 58th Street near luxurious Sutton Place on the East Side of Manhattan.
 
They offered to give him an apartment rent-free for life, moving expenses and, by one account, $1 million, if only he would vacate his rent-regulated studio on the top floor of a six-story brownstone.
 
A developer has already bought three other small adjoining buildings on the block and plans to demolish them to erect New York City’s latest opulent supertower: It would soar over 900 feet, some 80 stories, above the street in what the developer calls “Manhattan’s quintessential luxury neighborhood.”
 
But Mr. Werth, 81, whose longtime neighbors refer to him as the Sage of 58th Street, said his response was blunt: “I told them,” he said, “I ain’t going nowhere.”
 
Mr. Werth is only one obstacle in the quest by the developer, Joseph P. Beninati, to build the deluxe skyscraper. Opposition to his project has spread among the well-heeled in the Sutton Place area in a sign that at least some New Yorkers are exhausted by the relentless pace of construction that has transformed one neighborhood after another.
 
Slim, super-tall towers are fueling an extraordinary building boom, particularly along a stretch of 57th Street known as Billionaire’s Row, where at least eight skyscrapers are underway with apartments selling for tens of millions of dollars, primarily to foreign investors.
 
The lure of oversize profits is unmistakable. Builders are now planning residential skyscrapers as tall as the Empire State Building in areas once unthinkable: Downtown Brooklyn; Long Island City, Queens; and on a parcel next to the South Street Seaport in Lower Manhattan.
 
“This is the first time that a billionaire’s tower is going up in a residential neighborhood,” Mr. Beninati said. “New York has always been a city that reaches for the sky to express the aspirations of the people who live and work here.”
 
But residents of 16 co-op and condominium buildings near Mr. Beninati’s site have formed an alliance to try to stop the project, hiring lawyers and political strategists, and enlisting civic groups and elected officials, including City Councilman Benjamin Kallos, who represents the area, and the Manhattan borough president, Gale A. Brewer.
 
“This is about preserving our residential neighborhoods and the light and air for the people who live there,” Mr. Kallos said. “The community is finally fighting back against superscrapers.”
 
In a sense, the battle pits the “haves” of Sutton Place who want to preserve the genteel qualities of their neighborhood against the international 1 percent from Russia, the Middle East and Latin America who would be the likely buyers of condos in the tower, even if they, like many foreign buyers, lived in them just a few weeks of the year.
 
“It’s like sticking a Freedom Tower in a residential area,” said Lisa Mercurio, a local resident and member of the East River 50s Alliance, the group opposing the development. “This building is an investment bank for overseas oligarchs. It’s not meant to house real people in the neighborhood. What happens to the environment when the skyline is so cluttered up that the sun can’t shine down to the ground?”
 
Some of the fiercest critics live at the Sovereign, a 47-story co-op directly across 58th Street from Mr. Beninati’s proposed construction site. Built in 1975, it was the ultraluxury building of its era.
 
The architecture critic Paul Goldberger, writing in The New York Times at the time, described the building as “brutally destructive of the scale of 58th Street and Sutton Place.”
 
Mr. Beninati’s tower, opponents say, would loom 400 feet over the Sovereign. “I don’t think you can compare a 900-foot needle tower with the Sovereign,” said Gail Haft, a member of Sutton Area Community, a local organization.
 
The alliance is hoping to enlist the help of the de Blasio administration to rezone the area in the coming weeks before Mr. Beninati can get construction permits.
 
“It’s just way too big for the neighborhood,” Ms. Brewer said.
 
Still, the last time the neighborhood tried to stop a project, in 2000, its lawsuit against the developer was dismissed. That developer was Donald J. Trump, who ended up building a 72-story condominium at First Avenue and 47th Street.
 
In the meantime, Mr. Beninati says he has already acquired enough property and development rights, or air rights, from surrounding buildings to erect his tower even without Mr. Werth’s building. Mr. Beninati wants to buy Mr. Werth’s building and others nearby to make room for a bigger base for his proposed tower.
 
“We can’t have a city where people can just change the rules when they feel like it,” he said of the opposition’s effort to rezone the neighborhood.
 
So far, Mr. Beninati said he had spent about $120 million for land and tenant buyouts. He hired Cushman & Wakefield to find a financial partner and construction financing for the project, which will cost about $650 million to complete.
 
After months of fruitless hunting, Mr. Beninati said he remained confident he would find a partner. He said the apartments should sell for an average of $5,500 per square foot, or more than $43.5 million for a penthouse. Mr. Beninati is also actively trying to buy additional parcels on three sides of his site in order to expand the base of the tower, if not add to its height.
 
“It’s a real opportunity to do something special,” Mr. Beninati said, “but if a joint venture partner doesn’t show up, I’ll have no choice but to sell.”
 
Mr. Beninati started his career on Wall Street, and by the early 2000s he and his partners formed Antares Investment Partners, a real estate company that at its height claimed $6 billion in assets. The novice developers built speculative mega-mansions in Greenwich, Conn., and gained control of Harbor Point, a $3.5 billion development site on 82 acres in Stamford, Conn.
 
But in a classic case of overleveraging, Antares stumbled in the early days of the recession and lost control of most of its assets to lenders and investors.
 
Mr. Beninati resurfaced in Manhattan, forming the Bauhouse Group, which bought a building on West 29th Street in Hudson Yards with plans to convert it to condominiums and retail. But little has happened there since Bauhouse obtained a $35 million construction loan 14 months ago.
 
A stocky man whose salt-and-pepper hair falls to the collar of his custom-tailored suit, Mr. Beninati has the supreme confidence of a promoter who believes he can personally persuade building owners, tenants and others to come around to his way of thinking.
 
Late last year, a broker, Adelaide Polsinelli of Eastern Consolidated, brought Mr. Beninati to the owner of three buildings on 58th Street, which he bought in January. The rent-regulated residents of the buildings were protected under New York tenant laws, so he could not simply evict them. Instead, he called the tenants personally, talked with them for hours and offered them millions of dollars and assistance in finding new homes.
 
Unlike Mr. Werth, Jack Lesko took the money.
 
“I love the guy,” Mr. Lesko said of Mr. Beninati. He said he decided to leave his rent-regulated unit after the developer offered him a substantial sum, which he declined to disclose. “I had mixed feelings. But I’m now living in Florida with a 30-foot terrace and a cognac in my hand.”
 
Mr. Beninati’s company bought the air rights from several buildings on the block, including a co-op composed of two small buildings. It paid the co-op more than $11 million with Mr. Beninati’s partner, Chris Jones, telling the co-op members he expected to build a “13-story” building next door, according to the board’s notes from the meeting.
 
Mr. Beninati claims Mr. Jones never said 13 stories.
 
Whatever the truth, some co-op members were dismayed to learn what Mr. Beninati had in mind. Residents worried about the noise and inconvenience of construction. Others said they should have gotten more money.
 
But they are now resigned to the tower and are negotiating to sell their buildings entirely to Mr. Beninati for about $45 million. But the deal requires that four rent-regulated tenants, including Mr. Werth, agree to move.
 
Elias C. Schwartz, a lawyer for the co-op who recently met with Mr. Werth, said he conveyed an offer from the developer to Mr. Werth that included $1 million, although Mr. Werth said there was never a cash offer.
 
“The best thing for him is to avail himself of an extremely generous offer from the developer,” Mr. Schwartz said.
 
But Mr. Werth said he had no desire to leave a block where he knows many residents, the doormen and even the drugstore clerk who once kept the store open late to fill his prescriptions.
 
A Princeton graduate, Mr. Werth never married, but he said he still had a few lady friends. His career took him from the Army to American Airlines, Bankers Trust, the city’s redevelopment board and self-employment.
 
He wants to remain close to the bus lines that take him to his doctors and the Hospital for Special Surgery. “It’s like being in a small town,” he said. “Even if they paid me lots of money and got me into an apartment around here, it wouldn’t be the same.”

 

Issue: 
Community