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Retailer Sues Condo Board for $10 Million Over Lost Rent

Upper West Side, Manhattan

Retail space, cond-op board, lawsuit, ventilation system.

The commercial space at 2373 Broadway has been vacant for five years (image via Google Maps).

Aug. 30, 2023

We've all heard stories about lawsuits over rent. Now, in a man-bites-dog wrinkle, there's a lawsuit over vents.

The landlord of the storefronts at 2373 Broadway, a full-block, mixed-use building whose retail spaces have been dark for years, has sued the cond-op board representing the upstairs residents for $10 million for supposedly killing a pair of retail deals by delaying approval of new ventilation equipment, Crain's reports.

The owner of the commercial space, a limited liability company called Texwood Investment, claims that it was on the verge of inking a pair of deals with the grocery chain Lincoln Market and an outpost of New York-Presbyterian Hospital for a combined $1.8 million in annual rent. But the cond-op board, on which Texwood has a seat, allegedly has dragged its feet for almost five years on approving a key ventilation system that needs to be in place before any tenants can commit. Texwood is seeking at least $10 million in lost rent.

“The board has continued to this day to unreasonably withhold, condition and delay its approval of the plans relating to plaintiff’s installation and maintenance of the new cooling equipment, rendering the commercial unit unrentable and causing plaintiff millions of dollars in economic loss,” says the suit, which was filed in Manhattan Supreme Court.

The board at the building, a 350-unit cond-op called the Boulevard that was built in 1987 at West 86th Street, has not yet filed a legal response in the case. But based on court filings, the conflict seems to have roots that stretch back years and that stems from problems with previous retail tenants.

For years the street-level retail tenants were a Banana Republic store and a Gristedes supermarket. Residents of apartments above the stores complained about odors and noise emanating from the ventilation systems serving the commercial space, complaints that eventually led to Department of Buildings violations, court filings show.

When the two retailers shuttered around 2018, Texwood agreed to upgrade the vents to make them less offensive while also paying the board $100,000 for access and additionally throwing in a new bike room, according to the lawsuit. But even though the board appears to have agreed in principle to the upgrades at the time, it never formally signed off on construction plans, the suit claims.

The issue appears to have come to a head at a meeting last summer, when board members apparently reversed course and requested that the new ventilation system no longer be located on a low floor, as initially proposed, but instead sited on the roof of the 23-story tower, a change that Texwood says would be prohibitively expensive.

Texwood's response? See you in court.

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