Grand Central Sues Over Air Rights Taking

by: Joseph Grather
2 Oct 2015

Grand Central NYT 9-28-15In retaliatory fashion, the owner of Grand Central Station has sued the City of New York, et al. because of a recent approval that would allow its neighbor to construct a 1,000 foot high office tower.  The New York Times reported on September 28th that the owner “filed a $1.1 billion lawsuit in United States District Court in Manhattan that argued that the administration of Mayor Bill de Blasio, a Democrat, the City Council and the developer, SL Green Realty Corporation, had deprived him of his property rights when the city gave SL Green permission to build a 1,501-foot tall office tower, without having to buy any air rights from him.”

No so long ago, a prior owner of rail station brought a takings suit against the City of New York which wound up in the United States Supreme Court, Penn Central Transportation Co. v. New York City, 438 U.S. 104 (1978), which spawned the Penn Central regulatory takings test and to date almost 2,500 case citations.  As framed by the New York Court of Appeals:  The “specific issue presented in this case is whether, as applied to these plaintiffs, the city’s Landmarks Preservation Law and the action of defendants thereunder with respect to certain property commonly known as the Grand Central Terminal are unconstitutional. Trial Term responded affirmatively on the grounds that plaintiffs’ private property was taken for public use without just compensation and that they were deprived of due process and equal protection of the laws. We disagree.” The United States Supreme Court agreed with the Court of Appeals in the seminal case.

According to the Times, Grand Central’s “lawyers argued in the suit that by granting SL Green the rights to build a tower “for free” that is twice as big as had been permitted by zoning, the de Blasio administration and City Council had rendered Grand Central’s air rights “worthless.””

We shall see about that.