A New York state judge has lowered the curtain on RFR Holding’s play to keep the Chrysler Building, dealing a blow to Aby Rosen’s struggling real estate business.
Judge Jennifer Shecter granted a motion sought by the building’s landlord, Cooper Union, to evict the tower’s operator, RFR, after the firm defaulted on $21 million in rent and other obligations.
“Motion for summary judgement … is granted,” Judge Schecter wrote in a one-page ruling handed down Wednesday.
Cooper Union thanked the court for taking its side in a dispute that burst into the public sphere in September, when RFR filed a lawsuit to block the prestigious art and engineering school from terminating the developer’s lease to operate the landmarked tower.
“RFR could never overcome the basic fact that they were in arrears to the tune of $21 million and had not paid rent in months,” Cooper Union’s vice president for finance and administration, John Ruth, said in a statement. “Despite their desperate attempts to shift the focus, the problem has always been their continued failure to meet their obligations.”
Ruth said Cooper Union would work with Cushman & Wakefield and Savills to assume full management of the property and improve the tenant experience while maximizing the building’s value.
RFR declined to comment.
In 2019 Rosen’s firm acquired the right to operate the Chrysler Building for $151 million from Cooper Union, which owns the land underneath. RFR, owner of 3 million square feet of commercial space, agreed to pay $32 million a year in ground rent and planned to renovate the gem of Manhattan’s skyline, developed in 1930. But the developer apparently bit off more than it could chew, stopped paying rent last spring and was unable to restructure the lease.
In September Cooper Union announced it was terminating the lease and demanded RFR vacate the premises. RFR refused to leave and accused the school of mismanagement and driving away tenants. But at an October hearing, Schecter ruled that the developer was still on the hook for the rent.
“In terms of any defenses, I haven’t heard any that have merit,” she said.
Losing the Chrysler Building is the latest bad news for RFR. Lenders and city agencies have sued the developer for missed loan and tax payments at 17 State St., 522 Fifth Ave. and 90 Fifth Ave. The jewel in Rosen’s crown, the Seagram Building at 375 Park Ave., carries nearly $1 billion in mortgage and mezzanine debt that must be refinanced this spring.
