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By: Hellen Zaboulani
Cooper Union is poised to regain control of the landmark Chrysler Building. As reported by the NY Post, the school, which owns the land beneath the 1,046-foot- tall skyscraper, terminating the lease of developer RFR Holding over $21 million in unpaid rent.
Cooper Union reportedly sent RFR co-founders Aby Rosen and Michael Fuchs a lease termination notice on Sept. 13. The ground lease for the art-deco building was actually terminated on Friday, said John Ruth, Vice President of Finance at Cooper Union. “We are engaging a world-class property management firm, Cushman & Wakefield, to ensure a smooth transition for our tenants,” Ruth told The Post on Friday.
Back in 2019, RFR had partnered with Rene Benko’s Signa Holding to purchase the ground lease for the iconic 77-story tower for $150 million. Per the Post, the partners had been able to snap up the famed tower at a low price because the ground lease went up from just $7.75 million in 2018 to $31.5 million in 2023, and with a further increase to $41 million slated for 2028. Last November, however, Signa had unexpectedly collapsed and declared insolvency. Months later, an international court had ordered the Austrian property tycoon to sell its stake in the building. RFR was left scrambling to find a new partner, as per the Post. As of 2024, more than 50% the building’s 1.25 million square feet of offices are available.
For the past four months, R&S Chrysler, the name of the joint venture between Signa and RFR, has withheld payment from vendors and Cooper Union, the school’s lawyer wrote in a letter to RFR’s head of acquisitions. “Cooper Union provides substantial tuition assistance to its students,” the lawyer wrote. “While Cooper will continue to meet this obligation, your withholding of $21 million is not acceptable to us and demonstrates bad faith.”
On Thursday, RFR filed its own lawsuit, in a bid to hold onto the property. Per the Post, the lawsuit accuses Cooper Union of seeking “an improper and fatally defective eviction proceeding.” The suit claims the school failed to serve RFR with a proper notice of defaulted rent and lease termination and claimed it demanded incorrect amounts of payment. RFR is seeking for the eviction to be annulled.
The development company did not respond to the Post’s requests for comment.
The Chrystler building, located at the intersection of 42nd Street and Lexington Avenue in Midtown Manhattan, was completed in 1930. It was the world’s first supertall skyscraper and still is the tallest brick building in the world with a steel framework.
Cooper Union, the private college, was founded in 1859 by American industrialist Peter Cooper— one of the richest businessmen in the United States, who donated the vast majority of his wealth to the institution in a bid to provide talented young people with a good education which was “open and free to all”. While the school is no longer all free, it currently has over 800 students, and boasts an endowment fund of some $920 million as of 2021, per Wikipedia.
Cooper Union commented to note that the lease termination will not impact its student scholarships, and will also not affect the recent announcement that Cooper Union’s senior class will not have to pay tuition over the next four years, Ruth told The Post.
The college had “built in guardrails” to protect against such situations, he said.
