Billionaires' Row Lawsuit Highlights the Value of a Licensing Agreement

Most co-op and condo boards understand the importance of negotiating a licensing agreement when they or their neighbors need to repair their building — or when a developer erects a new building next-door. Most co-op and condo boards also understand that they need to flexible and fair. This, according to many lawyers and property managers, is a time to play nice, not get pushy or greedy.

But sometimes push comes to shove. It's happening right now on Billionaires' Row.

The century-old Gainsborough Studios co-op has filed a lawsuit seeking $1.5 million in damages plus interest from the developer of the tower next door — 220 Central Park South, home to some of the priciest apartments on Billionaires' Row, including the $238 million penthouse apartment of hedge-fund tycoon Ken Griffin, Crain's reports.

While the developer, Vornado Realty Trust, was building the 79-story luxury condo tower, the two organizations entered into multiple agreements meant to protect the co-op from any losses stemming from property damage caused by construction on 220 Central Park South, the suit says.

Gainsborough Studios did indeed suffer damages during construction, including to its windows, roof, skylights, façade and HVAC systems, according to the lawsuit, but Vornado has reneged on its agreement to compensate the co-op for these losses.

Gainsborough Studios was completed in 1908 and is one of the city's few surviving examples of a co-op meant specifically for artists. The building was "designed, managed and inhabited by artists" and provided them with space to both live and work, according to the city's Landmarks Preservation Commission, which gave the co-op landmark status in 1988.

The commission specifically noted the co-op's double-height windows that provided the artists' studios with an abundance of light. However, a 2023 PowerPoint presentation by the co-op proposed replacing the windows, saying that construction next door had caused their glass to crack and that repairing the existing ones was not worth it. Those claims, among others, led to today' lawsuit.

A two-bedroom condo at 220 Central Park South that appears to be the property's last developer-owned unit hit the market in mid-April asking $13.5 million — about nine times as much as the damages Gainsborough Studios is seeking.

Regardless of the numbers involved, this war between neighbors illustrates the importance of drafting a fair, flexible — and iron-clad — licensing agreement.