Stillman Development sues Times Square landlord that it says threatens to end $16M ground lease

Stillman Development International alleges its nonprofit landlord at the ground leased parcel at 215 West 42nd Street in Times Square is threatening to terminate the long-term lease, even as Stillman is in the middle of a delayed redevelopment.

Stillman is seeking to block the lease termination, or alternatively obtain a judgment of $60 million. The New York Post reported last year that the development was stalled as it lacked a tenant to take the space, and other retail venues along the stretch remain vacant.

Case LINK

Court filings represent the position of one party and are not necessarily accurate or complete.

The filing is a summons, not a complaint. The summons states the landlord, known as The New 42nd Street, sent a notice of default and to cure the alleged defaults, on May 14, 2024. The brief filings does not elaborate on the defaults.

Stillman signed the lease in 2017. The city at the time valued it for tax purposes at $15.88 million. The initial term was 25 years, with an option that would extend the total term to 49 years and another option that would extend the total term to 74 years.

On this parcel, there is a new building project, 121207078, filed for the structure, which seeks to add several floors, but the plan has not been permitted. Currently the building remains prepared for construction.

The property

The specialty building in Times Square has 12,176 square feet of built space. The parcel has frontage of 105 feet and is 100 feet deep with a total lot size of 10,400 square feet. The lot is irregular. The zoning is C6-7 which allows for up to 15 times floor area ratio (FAR) for commercial and up to 10 times FAR for residential with inclusionary housing. The city-designated market value for the property in 2022 is $16.1 million.

Development

NYC Economic Development Corporation submitted a new building construction project for a 34,313 square-foot retail (M) building at 215 West 42nd Street. The plan was filed on January 27, 2020. It calls for the construction of a 138-foot tall, six-story building and was filed with the New York City Department of Buildings under job number 121207078. The project is described in the filing as: filing herewith new building as per plans.

Violations and lawsuits

According to city public data, the property has received $1,250 in ECB penalties and $1,387 in OATH penalties in the last year.

There were no lawsuits or bankruptcies filed against the property for the past 24 months.

The neighborhood

In Times Square, The majority, or 58 percent of the 10.1 million square feet of commercial built space are office buildings, with hotel buildings next occupying 30 percent of the space. In sales, Times Square has near average sales volume among other neighborhoods with $1 billion in sales volume in the last two years and is the 8th highest in Manhattan. For development, Times Square has near average amount of major developments among other neighborhoods and is the 29th highest in Manhattan. It had 852,847 square feet of commercial and multi-family construction under development in the last two years, which represents 8 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of three of the 10 commercial properties representing 1,243,818 square feet of the 2,178,824 square feet. The largest owner is Chetrit Group, followed by Rudin Management and then Tishman. On the tax block, there was one new building construction project filed totaling 34,313 square feet. It is a 34,313 square-foot mercantile (M) building submitted by NYC Economic Development Corporation and filed by Jhaelen Hernandez-Eli with plans filed January 27, 2020 and it has not been permitted yet.

The surrounding

Within a 400-foot radius of 223 West 42 Street, PincusCo identified eight commercial real estate items of interests occurred over the past 24 months. Of those eight items, seven were loans above $5 million totaling $1.3 billion.

Direct link to the property’s ACRIS page and link to DOB NOW portal.