Developer Roy Schoenberg is launching an all-out public relations campaign as his battle rages on for control of a Cherry Street building site.
The Department of City Planning in the past week put a temporary halt to all land use applications at 235-247 Cherry St. until a civil lawsuit is concluded. Two not-for-profit groups, Two Bridges Neighborhood Council and Settlement Housing Fund, announced in April the sale of development rights to JDS Development Group. The firm plans to build a thousand foot residential tower on a part of the contested property. Schoenberg is suing the not-for-profit organizations, claiming they failed to honor a separate 2012 agreement.
Schoenberg, who owns Little Cherry, LLC, met last week with local elected officials to describe plans for a 47-story residential tower he wants to put up on a portion of a single story building that once housed a Rent-a-Center facility. The firm owns a long-term lease for that vacant space. The company also hopes to brief Community Board 3 on the project in the fall — at the same time JDS goes before CB3’s land use committee for a similar purpose. So there’s a possibility that the dueling developers will be facing off on the Lower East Side on one awkward evening in September.
In recent court filings, Schoenberg’s legal team said it was taken aback after reading about the deal with JDS Development in The Lo-Down on April 27. In a June 21 letter to state judge Jeffrey Oing, the lawyers wrote, “(The plaintiffs) appear to have transferred away to developer Michael Stern (JDS’s CEO) valuable development and other rights,” in an “apparent transaction” that “would completely and directly undermine any award” Schoenberg might receive as a result of the lawsuit. The attorneys seemed especially miffed at a statement made in our story by Alexa Sewell, president of Settlement Housing Fund. When asked about the pending lawsuit, she said the not-for-profit groups were, “100% certain we are going to prevail.”
Schoenberg and Michael Kramer, the firm’s director of real estate, talked with the The Lo-Down yesterday afternoon. Referring to the JDS team’s interview with this publication and to meetings held with residents in buildings adjacent to the development site, Kramer said, “We were not holding press conferences” about our project. But given the events of the past several weeks, Kramer said, they have decided that the local community should have the opportunity to weigh both proposals.
Last Thursday, Schoenberg and his team met with State Assembly member Alice Cancel, State Sen. Daniel Squadron and representatives of the Manhattan Borough President and City Council member Margaret Chin. Trever Holland, tenant association president at Two Bridges Tower, was also present (his building borders the proposed development site).
The developers said their project would encompass 330,000 square feet and include market rate apartments plus 70 units of affordable housing, as well as a community center and offices for Two Bridges Neighborhood Council. [The JDS plan would create 150 affordable units.]
While court documents indicated the sale price was $4 million, Schoenberg said that figure is misleading. It assumed the construction of a much smaller building than what is now anticipated. Kramer added, “The idea is that we’re all on the same time. We can arrive at a fair price.” [JDS is paying $51 million and planning a 500,000 square foot project.]
In court, Schoenberg has argued that Two Bridges and Settlement Housing are in violation of their 2012 contract. It required the developer to secure city and state approvals for the project within a specific period of time. The not-for-profit groups terminated the deal in December of 2014, saying Schoenberg failed to fulfill this requirement. But he contended that the organizations did not hold up their end of the bargain — which required them to help in winning those approvals.
The JDS plan calls for cantilevering the tower over portions of the one-story commercial building and a low-income senior rental building. But the footprint of the tower would be different than the one envisioned in Schoenberg’s proposal. Settlement Housing and Two Bridges are convinced that this design work-around is legally permissible. “The lawsuit does not prevent us from doing this,” Two Bridges’ Victor Papa told us in April. In their letter to the judge, Schoenberg’s attorneys strongly disagreed. “In addition to guaranteeing their victory before this court,: they wrote, “defendants tout that they have come up with a solution to maneuver around this very action pending before the court.”
JDS, of course, sees the matter very differently. A spokesperson provided us with the following statement yesterday afternoon:
As a tenant, Little Cherry (Schoenberg’s company) has no contractual rights to develop the site, and we expect that the lawsuit it has filed asserting such rights will be dismissed as wholly without merit. The owner of the site has made clear that it has no interest in pursuing a project with Little Cherry and, as such, any proposal it puts forth has no basis in reality. We believe these actions are an attempt to harm two longstanding non-profits and undermine a project that Settlement Housing Fund and Two Bridges Neighborhood Council wholeheartedly support. Our proposed development will bring much-needed affordable housing, new retail options, resiliency upgrades, and open space to the community—and we will see it through to its successful completion.
Local elected officials, led by Council member Chin, have asked the Department of City Planning to order a ULURP for several sites in the Two Bridges area, including 235-247 Cherry St. It’s something residents have called for in response to what they see as over-development in the gentrifying neighborhood. The ULURP would require community board review of the various development plans and approval by the City Council. Schoenberg supports a master planning process to address infrastructure needs. Previously, JDS declined to comment regarding Chin’s request of the city, although a spokesperson said the firm is committed to working with other developers to address community concerns.
Kramer spoke briefly last month with former CB3 Chairperson Gigi Li about an appearance before the board. But no official request has been made, according to District Manager Susan Stetzer. CB3’s new chair, Jamie Rogers, indicated yesterday, that he’s open to a presentation from Schoenberg’s firm. “The board hopes to hear as much information as possible,” he said, “on proposed developments in the neighborhood.”
See below for Schoenberg’s full letter to the judge, followed by JDS’s pre-application to the Department of City Planning.