A New York appellate court reversed an arbitration award that would have sharply increased ground rent for residents of Carnegie House, a 324-unit cooperative at 100 West 57th Street. The decision spares co-op owners from a rent reset that would have raised their annual ground rent from approximately $4 million to $24 million.
The dispute traces back to 2014 when Rubin Schron and David Werner Real Estate, through a Cammeby’s International Group entity, bought the land beneath the building for $261 million. In 2023, MSD Partners, a Michael Dell-backed merchant bank affiliate, loaned Schron and Werner $100 million amidst a lawsuit filed by a co-op owner over the ground lease terms.
In 2024, Carnegie House owners opted to extend their ground lease with a new term starting in March 2025. This extension required a rent reset based on a new land valuation. When both sides couldn’t agree on this value, arbitration ensued.
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During arbitration, a landlord’s attorney offered a paid position to the neutral arbitrator in another case. The shareholders asked the arbitrator to recuse himself, but he declined. In July 2025, the panel sided with the landlords, valuing the land at over $300 million. Schron and Werner then sought court confirmation of this award.
Shareholders contested this, arguing the panel had shown bias through various decisions. In January, New York’s Supreme Court sided with the landowners but agreed that the arbitrator’s behavior compromised the process. Shareholders appealed, leading to the recent ruling overturning the arbitration award.
Brett Dockwell, the shareholders’ attorney, believes a fair valuation would have been much lower. “An impartial panel would have likely arrived at a significantly lower valuation,” Dockwell said.
Co-op board president Richard Hirsch called the decision a temporary relief. “This ruling gives us a fair chance to negotiate reasonable rent terms or arbitrate before an impartial panel,” Hirsch told the New York Post. “We aim for an outcome that works for both parties and preserves our co-op for future generations.”
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Ground lease disputes in Manhattan co-ops often involve complex financial arrangements. When lease renewals occur, disagreements over land valuation can escalate quickly, putting residents at risk of higher costs or foreclosure if they can’t afford new terms.
A 57th & 6th Ground LLC spokesperson disputed Hirsch’s characterization. “These tenants, largely investors, can seek delays, but the facts remain. We’re confident the next arbitrator will agree,” the spokesperson said.
The two sides are now discussing the land’s value with no set timeline for resolution.
