SL Green Sues RFR Over Madison Avenue Building Access

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Is Aby Rosen holding up SL Green’s latest office project?

Marc Holliday’s REIT is taking Rosen’s RFR Holding to court over access to an office building adjacent to its Madison Avenue development site. SL Green alleges RFR has ignored repeated requests for permission to enter its properties at 350 Madison Avenue and 10 East 45th Street, delaying progress on the developer’s planned office tower.

Now, SL Green is asking a judge to issue a two-year license to enter portions of RFR’s properties to complete demolition work and the below-grade phase of construction of its planned 850,000-square-foot property at 346 Madison Avenue.

In order to move ahead with the project, SL Green needs to demolish two existing buildings, but the company claims it cannot proceed without access to RFR’s adjacent buildings. In a new lawsuit in state Supreme Court, the REIT alleges RFR has “ignored” repeated requests for access and “continues to hold up the progress of the project without having proffered any legitimate reason.”

A representative for RFR did not immediately respond to a request for comment.

The dispute traces back to January, when SL Green notified RFR that it would need access to the neighboring properties. According to the filing, RFR was initially receptive and granted limited access in February so SL Green could conduct a preliminary survey while the parties negotiated a broader license agreement.

But then talks stalled. SL Green says it requested access in February to install temporary protections on RFR’s building and received no response. The developer renewed its request in April, prompting another round of negotiations. RFR provided comments on a proposed access agreement, and SL Green says it revised the document to address those concerns.

Then RFR once again allegedly went silent.

In May, SL Green proposed an “all-hands” meeting to finalize the agreement. On June 2, RFR indicated it was reviewing the document based on additional comments from one of its partners and would respond soon, according to the filing. Instead, the company allegedly requested several extensions without providing any substantive response.

SL Green warned that failure to secure access would cause “immediate and irreparable damages” by significantly impeding its ability to develop the site.

The project is one of Manhattan’s most closely watched office developments. SL Green first bought the site, home to the former Brooks Brothers’ building, last September for $160 million. In May, the REIT sold a 49 percent stake in the project to Japanese developer Mori Building, valuing it at $175 million.

The partners plan to build a 46-story, all-electric office tower featuring column-free floorplates, nine terrace levels and a two-story amenity center anchored by an épicerie operated by celebrity chef Daniel Boulud. It will mark SL Green’s first ground-up office development since the completion of One Vanderbilt in 2021.

RFR bought 350 Madison Avenue, a 25-story office property, for $262 million in 2013. The deal also included the adjacent retail property at 10 East 45th Street.

“As with any major development project, we contacted our neighbor to ensure the appropriate protections were in place prior to work beginning,” said SL Green attorney Aaron Abraham of Troutman Pepper Locke. “When our neighbor inexplicably stopped responding to our communications, we had no choice but to seek relief from the court.”