Jefferies Group CEO Sues to Stop Tribeca Roof Deck

Jefferies Group LLC (JEF) Chief Executive Officer Richard Handler sued to stop construction of a roof deck across the street from his Tribeca penthouse apartment, saying it’s illegal and would spoil his view.

Handler, who indirectly owns the penthouse apartment at One York Street, filed a petition in New York State Supreme Court in Manhattan on March 25 against the city’s building commissioner, Robert LiMandri, and the owner of 50 Varick Street, to stop a construction project there and have its permits revoked.

An elevator vestibule for a proposed roof deck and bar area would block views from the penthouse, whose owners face “significant noise and light impingements from the project and future roof deck use as a late night rooftop bar,” according to the petition.

“The project will significantly obstruct the panoramic river views from petitioner’s apartment,” according to the petition. “In addition, use of the building roof deck as an outdoor event space and its concomitant noise will impair the use and value of petitioner’s apartment.”

Handler became CEO of Leucadia National Corp. (LUK) this month when the investment firm finished acquiring New York-based Jefferies. He still also runs the investment bank.

Jefferies paid Handler $19 million for fiscal 2012 and approved $39 million in restricted stock awards for the next three years.

Pay Package

The pay package for the year ended Nov. 30 was a 36 percent increase from the year-earlier period and included a $5 million cash bonus, $13 million in stock and a $1 million salary, the company said in January.

The penthouse at One York Street is a 6,096-square foot duplex with three bedrooms and five bathrooms, according to the property-listing website StreetEasy.com.

The apartment includes almost 2,000 square feet of outdoor space with a speaker system, a wet bar and a media room with a 100-inch motorized projection screen. The newly constructed unit was listed for sale by its sponsor in June 2009 for $34 million. Handler, using an entity named Raesky LLC, bought it in May 2010 for $23.7 million, according to property records. Raesky LLC is the owner of the One York Street penthouse, according to the petition.

The buyers took out a $15 million mortgage on the property, with Martha Handler listed as the borrower in records filed with the city. The borrower’s primary address is the same South Salem, New York, address from which Richard Handler, in his capacity as Jefferies CEO, makes federal campaign donations.

Monthly Charges

Monthly common charges on the apartment are about $6,139, according to the 2009 listing. Monthly taxes were estimated at $2,994.

The suit was previously reported today by the New York Daily News and the New York Post.

50 Varick mostly housed fiber-optics networks for telecommunications carriers until recently. It is being converted into an outpost for Spring Studios, a London-based fashion and marketing firm, with spaces for photography studios, offices, a restaurant and bar and event spaces, according to the petition.

The project also includes plans for a 20,000-square-foot roof deck with a capacity of 729 people. The project doesn’t comply with zoning laws and the owner evaded Department of Buildings review by filing permits for the project as “professional certifications,” it says.

Professionally Certified

The project was filed with the city as a series of jobs with permit applications that were “professionally certified,” meaning that professional affiliates of the owner certify the plans are in compliance with the law, according to the petition.

The plans have never been reviewed by the Buildings Department to ensure that they comply with zoning laws and the building code, and “the entire project thus has been permitted without appropriate review,” the petition says.

The plans violate zoning law because they don’t show any space between Varick Street and the roof deck, which must be at least 10 feet from the street, the petition says.

The petition also claims that the owners “rushed through” their plans with the Buildings Department. Spring Studios applied in November to Community Board One for a liquor license showing a venue with a projected capacity of more than 3,000 people that would close at 4 a.m. seven days a week and feature dining and liquor service until 2 a.m., live music and a DJ, according to the petition.

Community Opposition

The community board’s Tribeca Committee tabled the application in November “because of community opposition,” and postponed a vote again at its meeting this month “because substantial community concern remained,” the petition says.

“This plan is far out of scale for Tribeca, and the community has been deeply concerned by owner’s proposals,” the petition says.

The owner of One York contacted the Buildings Department to request an audit of the project and determine whether the permits should be revoked, and was told by Deputy Commissioner Pavan that the audit was proceeding, the petition says.

“If DOB issues a final determination that does not revoke permits for the project, petitioner intends to promptly appeal such final determination to the Board of Standards and Appeals,” the petition says. “By the time such action is taken, however, construction on the project may already be complete.”

Jefferies Spokesman

Richard Khaleel, a spokesman for Jefferies, declined to comment on the lawsuit. Y. David Scharf, an attorney representing the owners of One York, and the Buildings Department didn’t respond to telephone messages seeking comment on the petition. The owners of 50 Varick couldn’t be immediately reached for comment. Braford Sussman, an attorney for Spring Studios, declined to comment on the petition in a telephone interview.

“As tenants, Spring Studios is not named or involved in this action,” Sussman said. “This is a matter for the landlord, the Department of Buildings and the complainant.”

The case is Raesky LLC v. LiMandri, 100490/2013, New York State Supreme Court (Manhattan).

To contact the reporters on this story: Chris Dolmetsch in New York State Supreme Court in Manhattan at cdolmetsch@bloomberg.net; Oshrat Carmiel in New York at ocarmiel1@bloomberg.net; Laura Marcinek in New York at lmarcinek3@bloomberg.net.

To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net; Kara Wetzel at kwetzel@bloomberg.net; David Scheer at dscheer@bloomberg.net.

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