Good morning. It’s Thursday. Today we’ll look at a building on 57th Street where residents could face a huge rise in maintenance costs because of an increase in the “ground rent.” We’ll also look at the new City Council speaker.
Louis Grumet, who is a former state official and a former executive director of the New York State School Boards Association, bought a two-bedroom co-op in “the only reasonably priced place on 57th Street,” a white-brick building on the corner of the Avenue of the Americas.
That was in 2011, before luxury supertalls overwhelmed and overshadowed 57th Street and it became known as Billionaires’ Row.
Now a court ruling has Grumet worried. The decision, by Justice Nicholas Moyne in State Supreme Court in Manhattan, upheld a 450 percent increase in the rent that Grumet’s co-op pays the group that owns the land beneath the building. To cover the jump, he said he had been told, his monthly maintenance could skyrocket to more than $9,000 a month, from just over $3,700 now.
“Can we stay here?” asked Grumet, who uses a walker and whose wife navigates in a wheelchair. “I don’t know.”
The ruling involved a case brought by the landowner, which sought to confirm a three-person arbitration panel’s finding on the ground rent. The co-op had challenged the impartiality of the “umpire” on the panel, who was appointed to be neutral but did not disclose that the landowner’s lawyer had approached him about working on an unrelated project.
Justice Moyne said that “created the appearance of impropriety.” But he concluded that the co-op had not met “the very heavy burden of proof” required to show that the arbitration panel’s decision had been “prejudiced.”
Many co-ops own the land their buildings stand on. But the Ground Lease Co-op Coalition, a nonpartisan group of co-op owners, says that Carnegie House is the first of more than 12,000 ground lease co-ops potentially facing “land grabs from their landowners” because property values have surged since the first ground lease co-ops were formed, in the 1950s.
Richard Hirsch, the president of the Carnegie House co-op board, said the idea behind ground lease co-ops was “to allow middle-class people to live in the city.” By the coalition’s count, more than half of ground lease co-ops are in Brooklyn, the Bronx and Queens in areas where residents’ income is just under the citywide median of $79,000.
At Carnegie House, Hirsch said that prices of apartments in the building have plunged 90 percent since the dispute began and that banks would no longer write mortgages for prospective buyers.
‘An amount building residents simply cannot afford’
Hirsch called the judge’s decision “a devastating blow.” He said the increase would bring the ground rent, now between $4 million and $5 million, to roughly $25 million a year, “an amount building residents simply cannot afford.”
“In the middle of a housing crisis, our billionaire landowners are pulling out all the stops to push out middle-class New Yorkers,” he said in a statement. He said in an interview that the co-op planned to appeal the ruling, which was first reported by The Wall Street Journal.
A spokesman for the group that owns the land under Carnegie House said that the co-op residents are responsible for only 65 percent of the rent. Some 25 percent of the total is paid by the owner of the stores on the ground floor, he said, and another 10 percent comes from the parking garage in the building.
The spokesman also said that more than 100 apartments in the building are owned “purely as speculative investments or second homes.” He said the group that owns the land was “prepared to work in good faith to reach a resolution and work with permanent residents demonstrating a need for rental assistance.”
Hirsch said that about 95 apartments belonged to residents who wanted pieds-à-terre, had retired or had moved — but “the values have dropped so much that people can’t sell their apartments” if they wanted to.
Weather
Today will be sunny with a high around 48. Increasing clouds and calm winds are expected in the night and temperatures will drop near 36.
ALTERNATE-SIDE PARKING
In effect until Jan. 19 (Martin Luther King Jr. Day).
QUOTE OF THE DAY
“I’ve moved around a lot in my life, but the only place that ever felt like home to me was New York City, and it was precisely because of the diversity, because of the embrace of all people,” said Christine Clarke, whom Mayor Zohran Mamdani appointed to chair a city commission responsible for enforcing human rights.
The latest New York news
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On Epstein duty: The Justice Department has assigned more than 125 lawyers from the U.S. attorney’s office in Manhattan to review the two million documents in the Jeffrey Epstein investigation and determine what must be redacted before they can be released.
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New lines for a congressional district?: A court dispute over the lines of New York’s 11th Congressional District, which encompasses all of Staten Island and part of Brooklyn, represents one of Democrats’ few hopes of drawing maps in their favor for the 2026 midterms. If they succeed, they may oust the only Republican House representative in New York City.
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Child care programs brace for cuts: The Trump administration said it froze billion of dollars in funding for child care subsidies and cash support for low-income families in New York. Day care center operators said the funding freeze could gut child care programs that tens of thousands of families rely on.
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Accused of stealing billions in a crypto scam: Chen Zhi was arrested in Cambodia and extradited to China. Federal prosecutors in Brooklyn announced in October that he had been indicted on charges of swindling millions of dollars from Americans, including more than 250 in Brooklyn and Queens who had been targeted by one of the networks he worked with and collectively lost more than $18 million.
Menin elected City Council speaker
She was not Mayor Zohran Mamdani’s preferred candidate, but Julie Menin rallied enough support in the City Council to be elected speaker. Menin is a centrist Democrat, and my colleagues Dana Rubinstein and Jeffery C. Mays write that her new job will make her the structural counterweight to Mamdani’s democratic socialist mayoralty.
Menin, 58, said she would be the first speaker in the Council’s history to use subpoena power to investigate bad actors in the city’s business community. Menin, a former commissioner of what was then called the Department of Consumer Affairs, mentioned the debt collection and insurance industries as possible targets. Menin also ran the city’s census effort in 2020 after three years as the commissioner of the Mayor’s Office of Media and Entertainment.
Unlike her predecessor — Adrienne Adams, who was term-limited from running for another term on the Council — Menin also said that she was willing to use the Council’s subpoena power to investigate city agencies. She said she was particularly interested in looking into some of the no-bid contracts arranged when Eric Adams was mayor.
Many of Menin’s colleagues on the Council say they would not be surprised if she ran for mayor in four years, when she will be unable to run for re-election because of term limits. But she flatly denied that she had designs on the office across the rotunda in City Hall.
“This idea that I would run for mayor in four years, I am absolutely ruling out,” she said.
METROPOLITAN diary
Self served
Dear Diary:
I ordered pizza for a lazy-day dinner on a day I never got out of my PJs.
At about the expected time, I got a call saying that the pie had been delivered. It didn’t sound like my doorman so I asked who it was. Turned out, it was the doorman of another building on my Upper West Side block.
I asked why he had accepted the delivery. He said he had been busy, had told the deliveryman to leave it on the desk and had only seen my address and number after.
So I got dressed, went out, picked up my pizza and delivered it to myself.
— Laura Beattie
Illustrated by Agnes Lee. Tell us your New York story here and read more Metropolitan Diary here.
Glad we could get together here. See you tomorrow. — J.B.
Davaughnia Wilson and Ed Shanahan contributed to New York Today. You can reach the team at [email protected].
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James Barron writes the New York Today newsletter, a morning roundup of what’s happening in the city.
The post A Huge Increase in ‘Ground Rent’ Stuns Co-op Residents appeared first on New York Times.
