Rendering of Proposed Mixed Use Tower, located at 217 West 57th Street, New York. Image Credit: Adrian Smith + Gordon Gill Architecture.
Art Students League’s members argued that the process by which approval was gained to sell air rights violated League’s by-laws. On February 12, 2014, members of the Art Students League voted to sell air rights allowing an adjacent development by Extell Development Company. The vote took place after multiple meetings allowing members to speak on the proposal. Extell purchased 6,000 square feet of development rights, as well as the privilege to cantilever a portion of the new tower over the League’s headquarters for $31.8 million.
Landmarks had approved the proposal’s impact on the individual designated League headquarters in 2013.
Members of the League who opposed the air rights sale sought a preliminary injunction against the League and its Board of Control, claiming that the vote to sell was invalid, as a majority of all the League’s members did not cast votes in favor of the sale. The League’s Board of Control argued that only a majority vote by active members were necessary. Any individual in the League’s large member base who had become an inactive member could become an active member by voting in person at a member meeting or by submitting a written request for reinstatement to the Board. Justice Melvin L. Schweitzer denied the injunction, finding that the Board reasonably interpreted the by-laws as applying to active members, and denied further claims that the Board had misled members.
In another decision following the denial of the preliminary injunction, Justice Schweitzer granted the League summary judgment dismissing the claims against it by the opponents of the air rights sale. Justice Schweitzer found that the Board acted in good faith at all times and in the best interests of the League
The sale’s opponents appealed the decision. The First Department rejected the appeal, finding that construction had progressed to a point where it could not be undone without causing undue hardship, costing more than $200 million.
Caraballo v. Art Students League of New York, 2016 N.Y. Slip Op. 00883 (1st Dep’t Feb. 9, 2016) (Attorneys: Robert S. Smith, for Caraballo; Michael J. Volpe, Chaim Z. Kadegan, for League).
By: Jesse Denno (Jesse is a full-time staff writer at the Center for NYC Law)