Court rules that state owes Solow "brownfield" funding for East Side site

The Appellate Division of the New York State Supreme Court today upheld a lower court ruling that the State Department of Environmental Conservation must pay about $250 million to Sheldon H. Solow under the provisions of an old "brownfield development" program.

Mr. Solow, the developer of the sloping skyscraper at 9 West 57th Street, is planning to redevelop a 9.2-acre, waterfront site south of the United Nations along the East River that he acquired with the Fisher Brothers from Con Edison. The utility's plants on the site have since been demolished and Mr. Solow has bought out the Fisher Brothers' interest in the ambitious plan that is estimated to cost about $4 billion to erect several residential towers and an office building.

The "brownfield" program was amended last year, according to an article today at Elliot Brown at observer.com, "to close what were seen as gaping holes in the legislation [that allowed developers to get unlimited benefits from the state when they were building on polluted sites (the awards were a proportion of the total development costs)."

Mr. Solow's request to be included in the program was granted by the Pataki administration, but under the Spitzer administration the Department of Environmental Conservation reversed the earlier decision.

Mr. Solow then sued and the department argued that he was not entitled to the award because the land "would have been remediated," Mr. Brown wrote, "even without the incentive program, given its desirable, high-value location."

Mr. Solow and his partners bought the site from Con Edison in 2002 for about $680 million. The site stretches from 34th to 41st Street and the plan calls for five acres of open space, an office tower of more than 1 million square feet and more than 4,000 residential units.

Richard Meier and Skidmore, Owings & Merrill are the architects for the project that was reduced in size to meet some of the objections of Community Board 6 that still wants the site to provide access to an esplanade along the river. There is an exit at 42nd Street from the FDR Drive at the north end of the site. The community board and the Borough President's office recommended that the plan not be approved but it was approved by the City Planning Commission in January 2007 and in March 2008 the City Council approved the plan with some modifications that lowered the number of residential units to 3,000, cut out 500,000 square feet of office space and reduced parking spaces by more than a third to about 400. The changes also called for the creation of a new public school on the site and the designation of almost 600 units as "affordable" housing on the site and more off-site.

In December, 2008, Citibank filed an $85 million lawsuit against Mr. Solow for defaulting on an a $67 million loan payment and an $18.5 million payment on a letter of credit but Mr. Solow charged that the bank mismanaged the collateral and that the default is invalid.