Aby Rosen Tries to Block SL Green Air Rights Deal

Aby Rosen is ratcheting up his fight with SL Green.

Rosen’s RFR in December bought a $1 million apartment in the residential condo building at 5 East 44th Street.

What would Rosen — who basks in a lavish lifestyle of high-end art and a private yacht — want with such a modest home? As it turns out, the condo’s board was negotiating to sell its unused air rights to Marc Holliday’s SL Green — which has been the subject of Rosen’s scorn ever since the REIT outmaneuvered him last year to buy the prime office development site at 346 Madison Avenue.

The condo board’s bylaws require unanimous approval from all the owners to move ahead with any sale. Rosen believed his apartment purchase would allow him to thwart SL Green’s plans, while at the same time making his own competing offer for the air rights.

But the board has scheduled a special meeting for Aug. 13 where they plan to amend the bylaws to allow a supermajority of owners to approve the sale to SL Green, allowing them to bypass Rosen’s veto.

RFR on Friday filed a lawsuit in Manhattan supreme court asking a judge to void the contract with SL Green and prevent the board from changing its bylaws.

“This action arises from a rogue board that is acting well beyond the bounds of its authority,” RFR’s lawyers wrote in their complaint. “[RFR] brings this action . . . to hold the board accountable to the condominium’s governing documents, and effectively right the ship.”

A representative for the condo board could not be immediately reached for comment.

A spokesperson for SL Green called the lawsuit frivolous and said it won’t impact 346 Madison Avenue, which will remain on track and on schedule.

“We view this as straight out of the Aby Rosen playbook — losing out on a deal and suing everyone in sight,” the spokesperson told The Real Deal.

Rosen, on the other hand, said it’s a matter of owners rights. And then threw out the idea of teaming up with SL Green.

“As a unit owner in the condominium, we believe in transparency from the board and will protect the best interests of every owner in the building,” Rosen told TRD. “Separately, while we are very excited about both SL Green’s development at 346 Madison Avenue and our project at 350 Madison Avenue next door, we believe it would be a great thing for the city for us to join forces and deliver one supertower that is of much greater scale and efficiency.”

In his lawsuit, Rosen said had offered the board $6.5 million for the air rights — $500,000 more than SL Green’s offer — and agreed to put down a 20 percent deposit (topping SL Green’s 10 percent), but the board rejected his offer.

The drama all ties back to 346 Madison Avenue — the former home of the Brooks Brothers flagship — which SL Green bought in November along with the adjacent building at 11 East 44th Street for $160 million. The REIT plans to build a roughly 850,000 square foot office tower on the site. The 3,600 square feet of air rights it plans to buy from the 5 East 44th Street condo building could generate roughly 37,000 square feet of development rights through the Midtown East rezoning bonus.

Rosen owns a building next to the development site (350 Madison Avenue) and had tried to buy it when it went up for sale. But after SL Green closed the deal Rosen sued the seller — Luxottica heir and former Brooks Brothers CEO Claudio Del Vecchio — claiming they used RFR’s confidential information to help steer the deal to SL Green. That lawsuit is still ongoing.

Rosen also allegedly refused to grant SL Green access to 350 Madison in order to shore the building up while the REIT does demolition work on its site. SL Green sued RFR for access in June.

The animosity between the two developers may go back to 522 Fifth Avenue. RFR fell behind on the 23-story, vacant office building’s mortgage and went into foreclosure. SL Green then came in and bought the debt at a significant discount and continued with the foreclosure proceedings.

The two sides settled the case and RFR then sold the building to Amazon.

Rosen touted the Amazon sale as a major win, but the dealings with SL Green may have left a bitter taste in his mouth.