A rent dispute in Times Square threatens to derail a high-profile and long-dormant retail project as it attempts a pivot to residences.
Stillman Development International, which has been working to redevelop the historic Times Square Theater at 217 W. 42nd St. since 2017, has sued its landlord over a tripling of its rent.
The rent for the city-owned, Beaux-Arts edifice near Seventh Avenue jumped from $50,000 a month to $160,000 a month May 1, according to a source familiar with the matter.
Stillman, which apparently has been unable to revive a $150 million retail-conversion project planned before the pandemic, believes the new rent is way too steep for what’s still a development site, the source added. The firm sued in a legal maneuver to lock in the current rent — and to keep the city from taking back the colonnaded property — while the court hears the lease fight.
If city officials don’t address the developer’s complaint, they need to return Stillman’s $60 million stake in the project, plus interest and fees, the lawsuit says.
A spokesman for the city’s law office had no comment by press time. And a spokeswoman for The New 42nd Street, the city-selected nonprofit that functions as the theater’s landlord, also had no comment.
But Stillman’s lease changes were likely expected. According to the terms of the original 2017 lease, a 73-year deal at the time, The New 42nd Street could raise rents if the theater had no building permits in place after a certain amount of time, the source said.
At first, Stillman sought a retail use for the Times Square Theater, which opened in 1920, was converted into a movie theater in 1934 and closed for good in the late 1980s amid a seedy downturn for the neighborhood, according to the Cinema Treasures website. The $150 million plan, which called for adding several glass-walled floors atop the original limestone structure, at one point envisioned charging a single tenant $20 million a year for a seven-level space. But the proposal collapsed in early 2020 as Covid hit.
And the plan has reportedly not aged well, with tenants and lenders now skittish about such a large retail commitment, forcing Stillman to switch gears. The developer now seeks to put a rental tower above the unlandmarked theater with a mix of market-rate and affordable housing, the source explained, though the proposal has not gotten much past the design stage.
Stillman’s court filing is what is known as a “yellowstone injunction,” a move to stave off eviction in a landlord-tenant dispute until a judge rules on the case. Roy Stillman, Stillman’s president, declined to comment, and his lawyer could not be reached.
C. J. Hughes , 2024-05-22 19:30:10
Source link
