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One57 Tower Deal Brings a Fight

One tenant sued to get what she was promised in exchange for moving: a first-floor apartment.

By Josh Barbanel

June 3, 2016

Julie Collins agreed in 2006 to leave her modest, rent controlled-apartment in a building on West 57th Street in Midtown Manhattan to make way for the luxury apartment tower known as One57.

In exchange, she took a cash buyout and a walk-up unit on a high floor of an Upper West Side brownstone. The deal included a promise that she could move to a lower floor when an apartment became available.

Ten years later, Ms. Collins, 69 years old, is still waiting for that lower-floor apartment.

Her experience shows the lengths that developers sometimes go to clear sites for gigantic towers—and how those plans can go off track.

One57 - 1

By all accounts, the developer of One57, Extell Development Co., honored the terms of the agreement it made with her. But a few years after Ms. Collins moved, Extell sold the brownstone to Steven Croman, who has battled Ms. Collins and her lawyers for three years in court.

A prominent Manhattan landlord, Mr. Croman was arrested and charged in an unrelated criminal case last month with filing false statements to obtain loans on some of his buildings. He also was accused in a civil case of harassing rent-regulated tenants to try to get them to leave their apartments. Mr. Croman had denied any wrongdoing.

In March, Manhattan state Supreme Court Justice Cynthia S. Kern ordered Mr. Croman to pay $124,350 to cover Ms. Collins’s legal fees, while the final details of a renovation promised long ago by Extell were being worked out.

“Mr. Croman used the judicial system to force this elderly lady to climb four flights of stairs for years, while the first-floor apartment was empty without any rhyme or reason,” said Adam Leitman Bailey, who represented Ms. Collins. “This is a gross injustice, even though we prevailed.”

A spokeswoman for Mr. Croman’s real-estate company, 9300 Realty, said it respected the court’s decision.

“Since the judgment, we have gone above and beyond our contractual obligations to work with Ms. Collins to renovate and deliver the new apartment to her taste as promised by the previous owner of the building,” she said.

Asked about the dispute, a spokesman for Extell said: “It was a good binding agreement and she is getting the right that she is entitled to.”

“Somebody made her go through a court case, but at the end of the day hopefully the court will take care of her,” the spokesman said.

153 W 57th _ Collins

Ms. Collins moved to New York in 1970 and lived for more than 30 years in a fifth- floor apartment at 153 W. 57th St. In 2004, Extell paid $6.15 million for the building as it assembled the One57 site.

About the same time, Extell bought two adjacent row houses on West End Avenue near West 90th Street. It renovated one of them and eventually placed Ms. Collin there along with two other Extell buyout refugees. They had taken buyouts to make way for an Extell project on the Upper West Side.

The 17-page agreement signed by Ms. Collins and Gary Barnett, Extell’s president, showed the lengths that Extell went to meet Ms. Collins’s needs. One page spelled out renovation specifications, including the installation of a loft bed.

Extell gave Ms. Collins $600,000 in cash and said it would charge her $388.73 a month for a rent-stabilized apartment, according to the agreement filed in court. The agreement also included two pages laying out Ms. Collins’s right-of-first refusal when a lower-floor apartment became available.

After watching new tenants move into the first-floor apartment, Ms. Collins wrote to her landlord; when he didn’t respond, she sued. In April 2013, Justice Kern granted a preliminary injunction barring Mr. Croman from renting the apartment to anyone else.

Mr. Croman’s lawyers argued Ms. Collins wasn’t entitled to a new apartment because she had violated her lease by annoying neighbors by pounding on her ceiling to complain about noise. It also said she ran a massage therapy business out of her home.

Julie collins current home

Justice Kern rejected both claims. Mr. Croman’s company soon sent a letter to Ms. Collins offering her the apartment and giving her 15 days to accept or reject it. The judge then ruled that she was no longer entitled to the apartment, since she had turned the letter over to her lawyers rather than accepting the offer within 15 days.

But Justice Kern’s decision was overturned last year by a three-judge appellate panel. It said the letter, sent in the middle of litigation and after Mr. Croman had breached the promise made by Extell, wasn’t sufficient to trigger Ms. Collins’s right-of-first refusal under the original agreement.

After all the delays, Mr. Bailey said Ms. Collins expected to move to her new apartment in the next couple of months: “We are expecting that she will be able to have her new home very soon and live happily ever after.”

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