A
New York state judge has dealt a setback to the Carnegie House co-op board in its bid to avoid a massive rent increase tied to the building's ground lease at 100 West 57th Street. Judge Arthur Engoron denied the board's request to halt arbitration on the lease reset, ruling that they failed to show irreparable harm and that their claims were unlikely to succeed.

    The board is trying to delay negotiations with Cammeby's International Group and David Werner Real Estate, which own the ground beneath the building. If a new lease can't be agreed upon, the co-op could become rent-stabilized, potentially displacing over 300 families. The board has accused the landowners of negotiating in bad faith to force the co-op into insolvency.

    The owners have argued that the lawsuit was premature and that arbitration is required to reset the rent before it expires on March 15, 2025. They point to marketing materials from 2014 that projected a ground lease rent increase to $40 million by 2025. The board has countered with an offer of $5.4 million, which the owners rejected.

    With Wednesday's decision, the co-op board and Georgetown 57 have 15 days to appoint their arbiter to a three-member panel. Residents have been fighting the looming rent reset on other fronts, lobbying for state legislation to cap rent increases on ground leases and ensure renewals. The bill did not come to a vote last session.