Eli Zabar loses battle against the homeless shelter project next door

BY NICK GARBER

Restaurant magnate Eli Zabar was handed a forceful defeat in his quest to block the construction of a homeless shelter next door to one of his Upper East Side properties, as a judge accused his lawyers of using “shameful” tactics to delay the beleaguered project.

The nearly two-year-long dispute centers on a safe haven shelter that the city is seeking to build on East 91st Street, between First and York avenues. The site is next door to a warehouselike building owned by Zabar, where he grows produce in a rooftop greenhouse to sell in his restaurants. He rents out the lower floors to a children’s gymnastics studio.

The city has enlisted a private developer, Bayrock Capital, to build the 7-story safe haven. But Zabar, like countless next-door property owners before him, has held up work by refusing to let the developer install roof protections on his own building.

Daniel Schneider, an attorney for Zabar, said in a statement that he was “surprised and disappointed” by the ruling and denied the judge’s claims of deliberate delays.

Zabar’s attorneys have insisted that he harbors no ill will toward the shelter itself, arguing instead that the developer’s construction plans risk destabilizing his nextdoor building. But the developer claimed Zabar pledged privately to do “everything he could to delay” the safe haven—and Zabar himself admitted in sworn testimony that he disliked the project.

On Jan. 3 Justice Andrea Masley in state Supreme Court in Manhattan sided with the developer, ruling that Bayrock should be given access to Zabar’s roof—and assailing the restaurateur’s lawyers for “badfaith efforts to delay the project.”

“Respondents have engaged in shameful tactics that were anything but good faith,” Masley wrote, citing their requests for documents that they already possessed and repeated demands to adjourn the case.

In one instance, Masley accused Zabar’s attorney of misrepresenting facts about a roof inspection. The justice said Zabar should be forced to cover the developer’s $222,000 in legal fees as punishment for blocking “a development project essential to the community: providing homeless services during a crisis.”

Zabar’s attorneys have filed a notice of appeal, although the eventual appeal may center only on the legal fees, not the construction access. As for the claim of misrepresentation, Schneider said in a statement that he had made an innocent factual error.

“I have been consistent: The structural safety of my client’s building has always been my focus, and in my view, it remains an issue,” he said. “Moreover, it is evident from the documents in the record [on the docket] of this matter that the court is simply not correct in accusing me of any misrepresentation. I take the ethical canon and my oath very seriously and would never mislead a judge.”

Zoning issues

More hurdles remain for the project. Since March the safe haven has been beset by zoning complaints first raised by a group of neighbors opposed to the shelter, which prompted the city’s Department of Buildings to threaten to revoke the developer’s permits.

The city’s 15 “objections” included a claim that the safe haven had think about forward-planning, and we need to think about permitting.”

Proactive community engagement is also key to ensure buy-in from locals for minimal friction in getting projects in the pipeline, the panelists said.

“One of the first things we did was buy a community van,” said Doug Perkins, president and project director of Community Offshore Wind, which is developing a project off the coast of New Jersey and Long Island.

“We want to learn, listen, so we can design our projects in the most responsible manner, because the success of our project and of our industry will come if we are active participants in the community and communities are active participants in our projects.” ■ been misclassified as a “hotel” when it was really a “rooming house”—a use not permitted by the block’s zoning.

Bayrock has submitted filings to resolve the complaints, but the threat of revoked permits remained active as of press time, a DOB representative said.

In addition, social services organization Goddard Riverside has withdrawn from the project. City officials would not say as of press time whether a new provider had been lined up.

Since his famous 1970s split with the Upper West Side store that bears his surname, Zabar has built his own restaurant empire on the East Side, including markets, wine bars and the now-closed Vinegar Factory, which sat down the block from the disputed shelter site. ■

BY EDDIE SMALL

Despite the numerous, well-publicized woes New York’s office buildings have faced since Covid-19 hit, the buildings have already recovered almost all of their value from before the pandemic, according to the city Department of Finance.

The city has valued its office buildings at roughly $168 billion for fiscal year 2023–24, up from roughly $157 billion during the prior fiscal year. Prior to the pandemic, it valued the buildings at about $172 billion, meaning they are back to 97.6% of their 2019 worth.

The number certainly seems high, given the barrage of bad news hitting the sector, including Vornado’s writing down its Midtown portfolio by $500 million and Boston Properties’ warning that its office vacancy rate likely will keep rising.

But those trends, though concerning, are unlikely to be reflected in the value of the buildings themselves for quite a while, analysts said.

“Given the long nature of leases, the current market values don’t yet reflect most of the market activity that’s been happening of late,” said Sean Campion, director of housing and economic development studies at the Citizens Budget Commission. “It’s going to take years for rising vacancy rates to get reflected in valuations.”

As long as companies are still paying their rent, in other words, it does not matter much whether they are subleasing space or filling offices with workers, as far as valuations are concerned. Larger decreases would be unlikely to start until companies decide not to renew their lease and landlords are unable to find replacement tenants.

“Unless companies fold and go out of business, it takes a while for those changes to filter their way through the market,” Campion said, “unlike, say, hotels, where occupancy can go to zero in a week, like it did.”

Hotels are indeed further than office buildings from hitting their prepandemic worth, according to the Finance Department. They have kept about 86.9% of their value, falling from a collective $32.7 billion to $28.4 billion. Retail buildings, which were struggling even before the pandemic, have kept about 92.8% of their value, falling from $63.8 billion to $59.2 billion, the department said.

But the city’s valuations for retail and hotel