For nearly a third of his life, ever since he filed his first lawsuit against the state Urban Development Corporation back in 1981, Leonard Weiss has been fighting plans for a “new” Times Square.
The 67-year-old Mr. Weiss owns a parking lot on 41st Street near Eighth Avenue. The parcel is part of a site known as “8S” to the state agency in charge of the Times Square redevelopment project. Over the years, there have been various plans for it: a massive wholesale market, an apartment building, a hotel. Every time state officials threatened to condemn his property, Mr. Weiss fought back with a lawsuit, or the threat of a lawsuit, or sometimes just an angry rant.
State officials took to calling him “the mouse that roared.”
Now the state finally has found a buyer for the property, an entity it figures will be powerful and influential enough to succeed in building where many others have failed: the New York Times Company. On June 23, state officials announced a “nonbinding memorandum of understanding” with the Times Company, under which the company would buy the site–including Mr. Weiss’ parking lot–for a reported $100 million and receive city tax breaks to build a 40-story headquarters on it.
Still, Mr. Weiss says he has no plans to yield–not to the state, not to The New York Times . He has a lawsuit and a benefactor.
The suit, filed in 1997 in State Supreme Court in Manhattan, claims that the state can’t condemn his property because it failed to act within a 10-year time frame written into the law that governs condemnation proceedings.
Mr. Weiss’ benefactor is Gary Barnett, a relatively obscure diamond trader-turned-developer who has his own plans for the site. Mr. Barnett has an as-yet-unconsummated agreement to buy Mr. Weiss’ property and an adjoining lot owned by Queens butcher Sam Brach, who is also party to the lawsuit. Mr. Barnett won’t say how much he agreed to pay, only that “a substantial amount of money has changed hands” already.
State Supreme Court Justice Stanley J. Parness dismissed the lawsuit in May. Mr. Barnett, who has been financing the case for over a year, has filed a notice of appeal, and has expressed the desire, said Mr. Weiss, to fight the case to the bitter end.
“If [Mr. Barnett] wins the suit, then they have to deal with him,” Mr. Weiss said during an interview at the offices of his Sylvan Parking Company. “All he wants is a fair shake. He’s ready to buy, use his own money–he’s got all kinds of resources, no tax breaks from the state or the city–and develop it as a prime development site. Despite all that, the state is ready to give it to The New York Times , give them all the tax breaks, get us out on the cheap.”
“The difference between what they came in with and what The New York Times and [the site's developer] Forest City Ratner came in with is, with The Times and Ratner, you have financing, you have a tenant firmly in place,” said one state official familiar with the case. “That’s not the case with the earlier developers. If they had had that, the thing would have been built years ago.”
Neither the Times Company nor officials from the Empire State Development Corporation would comment for the record about the case. They’re expected to push to have the appeal heard quickly.
Mr. Barnett said that, if he wins, he would like to develop the parking lot properties as a hotel or an office building. But now that the Times Company is involved, some who have been following the case think he may have another plan in mind: holding up the deal through legal maneuvers until the Times Company either gives him a piece of the action or pays him to go away. Mr. Barnett, of course, says his only aim is to build his building.
“I believe that the property is worth the money,” Mr. Barnett said. “It’s a very good development site, and we should be allowed to develop the site.”
It’s unlikely that the garage owners and the developer will ultimately prevail, according to legal experts, who said such cases are seldom overturned on appeal. But they pose a potential aggravation, at the very least, for state officials and the Times Company as they try to close their deal and begin construction by next year.
An outstanding lawsuit could unnerve banks and insurers, making it difficult for the Times Company to finance development of the site. It is not uncommon in such cases for judges to stay condemnation until all appeals are exhausted.
“What he’d be saying is, ‘I’ve got this beautiful little red schoolhouse and if they bulldoze it, it’s gone,’ ” said Gerald Rosenberg, an attorney and expert in condemnation. “What the law has said is, parcels of real estate are unique. But it’s really hard to get sentimental about a parking lot.”
A Family Legacy
For Mr. Weiss, though, the lots were the foundation of a family business. A gruff-spoken Crown Heights native, Mr. Weiss served in the Navy during the Korean War. He began assembling his modest parking empire–besides owning the lot on 41st Street, he leases the adjacent one and owns three in Queens–after returning to civilian life.
“I’ve been running these [Times Square] locations since I bought them June 1, 1966, and I planned for them to be in my family for the next generation or two,” said Mr. Weiss, who said he has five grandsons.
For now, he operates his business out of a small suite of offices in a building on Seventh Avenue. The street beneath his window is crowded with construction crews working on the new Times Square. Waving a meaty arm toward the window, Mr. Weiss gave a tour, building by building, of his vanquished comrades in the condemnation wars.
“See that building over there, that empty limestone building, that used to be owned by an outfit called Rosenthal Factors,” Mr. Weiss said. Imre Rosenthal, a garment-district financier who died in 1996, financed many of the early lawsuits fighting condemnation. “He loved that building. And he fought this like hell with us. He didn’t want to get out of there, but ultimately they took it away from him.”
Indeed, by 1990, a series of court decisions–many of them authored by the same Justice Stanley Parness–had established that the state had the right to do pretty much whatever it wanted in Times Square. But even as the legal obstacles to redevelopment were cleared away, economic obstacles intervened during the early 1990′s. The plan to build a wholesale market stretching between 40th and 42nd streets and Seventh and Eighth avenues was shelved. Mr. Weiss’ parking lots were safe for the time being.
In 1993, planners began to regroup. The Urban Development Corporation–now known as the Empire State Development Corporation–held hearings on how best to revise its Times Square plan. Transcripts of the hearings, entered into the court record because the state believes the transcripts prove it acted within the time limit for condemnation, show that Mr. Weiss himself testified at the hearings.
“I have had this sword of Damocles hanging over my head for about 12 years now,” Mr. Weiss said. “The fact remains that the [Empire State Development Corporation] continues to act as dictators–because in a sense they are no different than Hitler was in Germany. Hitler took away property from people and never compensated them.” And that, he said, is what the state is trying to do to him.
Over Mr. Weiss’ objections, the hearings eventually resulted in a revised plan which concluded that development might occur on his land by 2015.
But the Times Square comeback proceeded faster than anyone expected, and soon Mr. Weiss began hearing renewed rumblings of development on his property. Then he seized on a clause in the condemnation statute. The clause stated that when a project is done in stages, condemnation of any site must be “commenced within ten years.” Mr. Weiss brought suit; that 10-year window, he argued, had closed in 1996.
“Top ranking officials … used demeaning, offensive, and insulting language” in their discussions with Mr. Weiss, according to the legal complaint, referring to him as “the mouse that roared.”
“And I get just what mice get,” Mr. Weiss said in an interview, “which is nothing but leftovers.”
Leftovers, in this case, being the amount of money the state decided to compensate him for his land. He believes the state planned to give him $6 million to $7 million. He decided to see if he could do better. He and Mr. Brach, 71, a Romanian native and Holocaust survivor who owns two supermarkets in Queens, began talking to developers about selling the site.
“The hot breath of the state has been on my neck since Day 1,” Mr. Weiss said. “So I felt if I could go out and get more than the state was going to give me, I thought it was the smart thing to do.”
After talking to a number of developers, Messrs. Weiss and Brach settled on Mr. Barnett. The two parties drew up a deal for the land, which will not close until the lawsuit is resolved, Mr. Weiss said. When asked how much Mr. Barnett will pay for the land, Mr. Weiss laughed.
“More than what the state would give us,” he said.
Mr. Barnett runs a private company called Intell Investment and Management Company, which has about $1 billion in holdings. Until recently, he has kept a fairly low profile. Mr. Barnett’s company co-developed what was to be the Planet Hollywood Hotel at Broadway and 47th Street. But when the chain filed for bankruptcy, Intell bought out the restaurant’s stake for a reported $32 million. Earlier this month, Intell agreed to an estimated $175 million lease deal with Starwood Hotels and Resorts Worldwide, Inc.
Before that, Mr. Barnett’s most high-profile play in New York probably was the acquisition of the historic Belnord apartment building on the Upper West Side. “He’s certainly on the more reserved side, which tends to be rare in our business,” said Ziev Feldman of the Property Markets Group, a partner in the Belnord deal. Intell has offices in New York, Louisville, Ky., and Belgium, where Mr. Barnett once worked in the diamond trade. In an interview, he said he had “European partners” who financially back Intell.
According to Mr. Barnett, last year he and Mr. Weiss had met with Wendy Leventer, head of the 42nd Street Redevelopment Corporation, to discuss a deal: If the state would name Mr. Barnett as developer of the site, Mr. Weiss would drop his lawsuit. Both sides asked the judge to delay his decision while settlement negotiations were ongoing.
The state told him they would take a pass, he said, and would instead open the property to bidding by all comers. Then he read in the papers that the state was negotiating exclusively with the Times Company.
“I do not see why this deal is being negotiated in secret,” Mr. Barnett said. “I don’t know whether The New York Times gets a separate set of rules, but I sure think this seems to be a very arbitrary process. There was no reason not to follow the public process. Who’s to say that The New York Times . .. is the best candidate for the site?”
Under the Times Company’s agreement with the state, first reported (appropriately enough) in The New York Times on June 20, the paper’s parent corporation would pay the state $100 million for the site. In return, the corporation would receive city tax breaks and agree not to move some of its employees out of the city.
Mr. Barnett said he also inquired with the Times Company about the possibility of acting as its designated developer for the site. But the Times Company limited its search to a handful of the city’s best-known builders, and Mr. Barnett, who has never built a Manhattan skyscraper, was not considered to be in that league. In February, the paper picked Bruce Ratner, of Forest City Ratner Companies, for the task of developing the 1.37-million-square-foot building.
Then Justice Parness spurned Mr. Barnett, too. The 1993 hearings at which Mr. Weiss spoke, the judge decided, had allowed for public input into the redevelopment project and essentially restarted the 10-year condemnation calendar.
Mr. Weiss called the decision in his case “cockamamie.” But after so many years of setbacks, he’s stoic about his ultimate chances of success.
“I expect that within a very short period of time they will be knocking on my door,” Mr. Weiss said.
“There seem to be special rules for the rich and famous and other rules for the poor and downtrodden,” he continued. ” The New York Times everyone wants to come in and put their new business venture on our property and have the state pay us whatever they want to pay us, which certainly doesn’t sound very democratic to me, but you know, you can’t fight The New York Times .”
A few moments later, as Mr. Weiss was showing his visitor to the door, he brightened a bit.
“Like I say, if we win this lawsuit, then there will be some fireworks.”