Gary Barnett is no stranger to controversy, and it will take a lot more than a litigious tenant backed by sympathetic advocacy groups to beat this guy in a proverbial street fight.
The Backstory Leading to Litigation
The facts are relatively straightforward: starting in 2014, Barnett assembled several properties on the UES with the aim of building a 22-story, 459-unit mixed-use tower. Greg Marshall—a holdout rent stabilized tenant in one of the buildings—refused to leave arguing he is entitled to an automatic lease renewal. Barnett countered that he could remove tenants when demolishing a building. And he’s correct: the rent laws allow landlords to deny lease renewals to stabilized tenants if they have legitimate plans to raze a building. In 2022, the Appellate Division unanimously agreed.
Barnett Victory at a Cost
Nonetheless, Barnett has a bit of a public relations nightmare on his hands. Groups supporting Marhsall have launched a $200,000 campaign against him, including the launch of a website at www.blamegaryforit.com that labels Barnett “the architect of the housing crisis.” A bold and misdirected claim that is patently farcical. The cause of NYC’s housing failure is institutional and systemic, goes back decades and cannot be accredited to any one person.
One of these group’s leaders claimed Barnett “harassed and did everything he could to get every other tenant out of that building.” A dubious remark at best and defamatory at worst. Harassment claims are taken seriously by DHCR and perhaps more so when the alleged perpetrator is none other than Gary Barnett—a NYC developer with more than 25 million sq. ft. of past and future development projects under his belt, including the iconic supertall tower One57 (a reference to the 57th Street Billionaire’s Row where it stands).
Going Forward, Will Developers Employ Barnett’s Strategy
One possible outcome of this kerfuffle could be more attempts by developers to vacate rent stabilized buildings by filing permits and plans to demolish existing buildings. But is that such a bad thing if the new projects result in NYC having more total and affordable units? According to The Real Deal, housing attorney, Sherwin Belkin, said he has seen “some increased interest” by developers in employing Barnett’s strategy. Another outcome of course is more legislation from Albany making it more challenging for developers to clear out tenants. In fact, one state Senator Liz Krueger already has already proposed legislation making it tougher to remove tenants.
Will Legislators Step Up on Housing Reform or Punish Developers and NYC Residents
The son of a Talmudic scholar and self-described “poor boy from the Lower East Side,” Barnett couldn’t be more right on this issue. He followed the letter of the law and has a court case ruling to prove it. The real culprit behind NYC’s housing crisis is decades of ill-conceived and failed policies emanating from Albany. Villainizing developers is easy, legislating is difficult but failing to do so is unforgiveable. How about legislation that creates much needed housing without punishing the developers who build it?
Website Source: Cifuentes, K. (2024, January 30). “Blame Gary”: Holdout tenant targets Extell’s Barnett with $200K campaign. The Real Deal. https://therealdeal.com/new-york/2024/01/30/gary-barnetts-holdout-will-not-fold/ Clarke, & Taylor. (2019, January 17). The Man Behind Billionaires’ Row Battles to Sell the World’s Tallest Condo. The Wall Street Journal. Retrieved February 6, 2024, from https://www.wsj.com/articles/the-man-behind-billionaires-row-battles-to-sell-the-worlds-tallest-condo-11547739897 DHCR Fact Sheet Link: https://hcr.ny.gov/system/files/documents/2023/11/fact-sheet-11-11-2023.pdf
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