The Adams administration’s bungled plans for a sea wall on a stretch of East River waterfront cost the city a precious new life sciences facility when it was most needed — and cost its would-be developer at least $50 million, a bombshell lawsuit claims.
Alexandria Real Estate Equities (ARE), a NYSE-traded developer, claimed it has tried for years to construct a third tower to complete its life sciences campus on First Avenue between East 28th and East 30th streets, adjacent to Bellevue Hospital, according to lawsuit filed in Manhattan federal court Tuesday.
The company already put up two Alexandria Life Sciences buildings on the site’s southern portion. Its 1 million square feet of laboratory and research space is 95% occupied, with leases held by leading pharmaceutical and biotechnology companies. Popular waterfront restaurant Riverpark is also located in the eastern tower.
But the Economic Development Corp. and the Health + Hospitals Corp. repeatedly stalled ARE’s effort to build a North Tower between East 29th and East 30th Street, despite the firm’s right to build there under a binding option it exercised to do so in 2019, according to the suit.
In a statement to The Post, Alexandria founder and executive chairman Joel Marcus said that his firm has invested over $1.5 billion in the project, which “ led the growth of the city’s commercial life sciences sector from two commercial companies in 2010 to more than 100 local biotech companies today.”
But he said the EDC and H+H “fraudulently strung us along for years with false assurances and concealed essential facts as part of an insidious scheme” to make ARE pay for the sea wall and “intentionally blocked us from timely developing our third tower.”
The alleged “fraudulent scheme” left ARE “with a severely impaired contractual option it … cannot implement in the face of Defendants’ floodwall demands, which are impossible to satisfy,” the suit says.
Officials of the EDC and H+H couldn’t immediately be reached.
The saga dates back to 2007, when the Michael Bloomberg administration tapped ARE subsidiary ARE-East River Science Park to develop the Big Apple’s first commercial life-sciences campus under a ground lease with the city.
ARE swiftly developed the first two towers. When superstorm Sandy struck in 2012, the city recognized the need to build a sea wall at the location.
The agencies assured ARE in 2015 that FEMA would fully pay for the wall and that it would not “materially impact the North Tower’s development, construction or operation,” the just-filed suit says.
But EDC and H+H allegedly couldn’t come up with a final design for the wall. In 2019, they told ARE they wanted a portion of the wall to be integrated with the foundation of the North Tower. The developer says it agreed to cooperate, although they weren’t required to do so, when the agencies again assured the flood-protection plan wouldn’t impact construction of the new building.
But the city continued to change the design again and again, frustrating ARE’s efforts to build. The city moreover wants ARE to pay for future design changes even though the company was not required to assume the costs, the suit says.
ARE says the city knew since 2020 that the plans were in flux and that FEMA approval might take years.
The delays, the suit says, “caused Alexandria to miss the life-science bull market … which has now substantially softened nationally.
“At the same time,” the suit says, the EDC “encouraged and induced other developers to build life science projects … based on erroneous and exaggerated information about demand.”
Although the suit makes no mention of it, the city plans two major life sciences projects close to the ARE site. A so-called Science Park and Research Campus spanning two million square feet in the Kips Bay neighborhood is currently going through the city’s Uniform Land Use Review Procedure.
