New York CIty Council Member Ben Kallos

The Real Deal ​Proposed downzoning could affect price at auction for Bauhouse's 3 Sutton Place by Editorial Board

​Proposed downzoning could affect price at auction for Bauhouse's 3 Sutton Place

Proposed downzoning could affect price at auction for Bauhouse's 3 Sutton Place
The Real Deal

Midtown East residents are accelerating their efforts to downzone and curb building heights in Midtown East, ahead of the auction for the Bauhouse Group’s 3 Sutton Place on East 58th Street.

Earlier this month, a bankruptcy judge ordered the sale of the beleaguered site at 426-432 East 58th Street, where Joseph Beninati’s firm has proposed to build a 950-foot tall tower to pay back loans on which he had defaulted.

The community group’s new zoning plan would curb building height in the East 50s along the East River at 260 feet, and the members are hoping to delay the Sutton Place project until their new zoning plan takes affect. That could affect the price at auction.

Ben Kallos, a Manhattan Council member who supports the proposal, which was spearheaded by Alan Kersh, a resident of the 47-story Sovereign across the street from for-sale site, told the Wall Street Journal that he wants “to stop the march of 1,000-foot towers into residential neighborhoods.”

Kersh’s apartment, at 425 East 58th Street, is 250 feet above ground, and his view would be blocked by Beninati’s tower.

Kallos has also helped block the demolition of the site. After an audit requested by Kallos, the DOB didn’t approve permits for work on the neighboring building, 426 East 58th Street, which is necessary for the demolition to proceed.

The sale of Sutton Place is meant to help pay back the $130 million in loans Beninati’s Bauhouse Group TRData LogoTINY had taken from N. Richard Kalikow’s Gamma Real Estate to assemble the site. In January, Beninati defaulted on the mezzanine loan and subsequently filed for bankruptcy to prevent Gamma from foreclosing on the property.

Beninati has filed suit against Kalikow, alleging that he conspired to take control of the project, and Kalikow filed a suit against Beninati’s associates over their role in the project.

A judge is expected to rule on Beninati’s suit against Kalikow on Nov. 30. 



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