Tenants of Manhattan House have filed a lawsuit to cancel the owners’ proposed condominium conversion. Manhattan House is a 583-unit apartment building on Manhattan’s Upper East Side. The $1.1 billion offering is the largest proposed condominium conversion on record.
On Tuesday, July 3, tenants represented by David Rozenholc, filed an Article 78 petition claming that New York State Attorney General Andrew Cuomo arbitrarily and capriciously approved the sponsors’ condominium offering plan.
In the court papers, tenants claim that Cuomo abused his discretion on various grounds by, among other things, overlooking defective certifications by sponsors Jeremiah O’Connor and Richard Kalikow—and by their engineer—excess vacancy issues, and violations of the Martin Act.
This is the latest development in what has proven to be a highly contentious and problem-ridden conversion, with the two co-owners currently embroiled in litigation directed at ousting each other from the project.
To date, only a single insider has offered to purchase, the exclusive period for insiders to buy having been extended until July 20, when the petition will be heard.
Credit Suisse underwrote the Manhattan House conversion, together with other condominium projects, as part of a mortgage backed securities loan placed in 2005. The Manhattan House portion represents 54.5% of the entire loan.
