City, State Play Defense in Mamdani Agenda Real Estate Suits
The city and state are trying to fight back against lawsuits targeting the Mamdani agenda.
In one of the suits aimed at New York’s pied-à-terre tax surcharge, the state has now filed for a change in venue.
The plaintiffs, developer Steve Wynn, former Secretary of Commerce Wilbur Ross, and his wife Hilary Geary Ross, filed their suit in Suffolk County, on Long Island. The state, supported by the city, is now trying to move the case to New York County. They say the suit is related to real estate held in New York City, so that is legally where the claims should be heard.
The plaintiffs’ attorneys said this is just an attempt by the state to get a more favorable audience. The current judge on the case, Frank Tinari, is a Republican. Manhattan’s judicial bench is majority Democrat.
Suffolk County is not where the pieds-à-terre at issue in the case are located; it’s where the Rosses own “a residence,” according to their attorney. The issue doesn’t concern the real property in New York City itself, but rather the constitutionality of the tax, said James Catterson, an attorney for the plaintiffs with Pillsbury Winthrop Shaw Pittman. That means Suffolk is an appropriate venue, he said.
The city did achieve a venue change in another suit, the one challenging the city’s rent freeze in rent-stabilized apartments. But, despite the move, that case is still before a Republican judge, Brendan Lantry.
The rent freeze suit is a bit further along, and the city is now trying to appeal a discovery order from Lantry. The city was ordered to turn over all communications between certain Mayor’s Office staff and members of the Rent Guidelines Board, with the idea that such communications could show inappropriate collusion between the Mayor’s Office and the RGB. The city agreed to provide screenshots of any found communications followed by a forensic exam from a third-party vendor within 30 days.
The screenshots have now been produced and revealed communications mostly about logistics and scheduling. There was some circumstantial evidence that could point to some collusion, but certainly no smoking gun. So the city is fighting to avoid the forensic exam.
The forensic analysis would involve 26 people at the Mayor’s Office and RGB giving over their work and personal phones to a vendor for up to eight hours to essentially have their data copied, including emails, messages and photographs. The city is arguing that this is duplicative, burdensome and invasive. It could affect the security of the mayor and the privacy of RGB members (some of whom are attorneys who likely have privileged communications with clients). Outside of just time spent by city staff, forensic collection would “cost the taxpayers almost $100,000,” the city said in a filing, up from the $22,000 the initial manual collection cost.
Randy Mastro, an attorney for the plaintiffs in that case, highlighted in response that the city agreed to the forensic exam just about two weeks ago.
What we’re thinking about: I’m thinking about the fraud allegations against Brooklyn real estate broker Bert I. Dweck. Got a tip? Send it to lilah.burke@therealdeal.com.
A thing we learned: The annual budget required to sustain a dual-income family of four in New Jersey rose by about $40,800 between 2021 and 2026, according to Living Wage Institute data reported by Bloomberg.
Elsewhere…
—- Top Albany lobbying firm Brown & Weinraub has started its own Super PAC, to raise money for itself, New York Focus reports. Two clients of the firm, Kalshi, the prediction market platform, and the Chinese American Independent Practice Association, a doctors’ group, have mostly funded the PAC thus far.
—- Mayor Zohran Mamdani and City Council Speaker Julie Menin announced the expansion of a pilot to expedite the discretionary funding process for nonprofits. Up to 800 nonprofits will be eligible for the pilot, which is estimated to get funding out nine months faster, according to a release.
—-The city of Buffalo is suing the Seneca Nation over a plan to build a $10 million fuel station, convenience store and dispensary, Spectrum News reports. The city says the tribe did not get the proper approvals, but the Seneca Nation says the city is undermining its sovereignty, as the land was granted federal restricted fee status.
Closing time
Residential: The most expensive residential sale recorded Wednesday was $9.5 million for a 3,287-square-foot condominium at 53 Leonard Street in Tribeca. Tinnie Sassano and Yardena Agresta with Compass had the listing.
Commercial: The most expensive commercial transaction was $7.25 million for adjacent apartment buildings at 2900-2916 Saint Theresa Avenue in Pelham Bay. Combined, there are 99,257 square feet and 103 residential units.
New to the Market: The highest price for a residential property hitting the market is $45 million for a 10,252-square-foot townhouse at 51 East 80th Street on the Upper East Side. Adam D. Modlin and Andrew Nierenberg with The Modlin Group have the listing.
— Matthew Elo
