Who Owns Grand Central Terminal and Why? Once More With Feeling.

A week or so ago, we posted the question of who owns the Grand Central Terminal, but so far, nobody came up with the answer. This is not surprising once you learn the answer. No, it isn’t Penn Central; though it is still around — it’s now an insurance company or something unexpected like that. And it isn’t the City of New York or any other government/transportation entity. You might think that after all the sturm und drang of the Penn Central Transp. Co. v. City of New York litigation, that would be the case. But it isn’t.

According to the New York Times (Sam Roberts, Grand Central’s Flesh-and-Blood Landlord, N.Y. Times, Jan. 29, 2013), it’s “the balding 52-year old” fellow named Andrew S. Penson who  — in the words of www.crainsnewyork.com of June 13, 2013, “quietly snapped up ownership of one of the most famous train stations in the world, Grand Central Terminal” some eight years ago. He is said to have done that “with dreams of minting hunderds of millions of dollars by selling off the landmark’s more than 1 million square feet of unused development rights.”

“Developments rights”? You mean those air rights above Grand Central? It would so appear. But in a familiar repetition of a familiar story, Penson’s plan “was broadsided by Mayor Michael Bloomberg’s proposal to create out of whole cloth millions of square feet of development rights in midtown east and sell them off to jump-start a new generation of bigger, smarter office towers.” So “Mr. Penson is fighting back,” and has hired none other than David Boies of Bush v. Gore fame, as Crain’s puts it, “to press his case in court if need be.”

We admire Mr. Boies’ forensic accomplishments, but somehow his name does not leap to mind when the subject of inverse regulatory takings comes up. In fact, we would like to know how many inverse condemnation cases Mr. Boies has actually tried, or handled on appeal as lead counsel. Still, a big-shot New York lawyer is a big-shot New York lawyer, and he may just pull it off. Then again, he may not. We await the event with bated breath.

But be that as it may, we recall how in the days of the Penn Central litigation the police power hawks in New York and elsewhere, carried on how valuable those Grand Central terminal air rights were, and how their existence — if only on paper — should keep Penn Central content in the belief that it could use those “rights” to build elsewhere, even on lots that were already occupied by substantial buildings  — like the Biltmore Hotel, if memory still serves.

If you are interested in a detailed autopsy of the earlier Grand Central/Penn Central litigational fiasco, we invite you to read our efforts in Making Laws and Sausages: A Quarter-Century Retrospective on Penn Central Transportation Co. v. City of New York, 13 William & Mary Bill of Rights Journal 679 (2005).*  It’s all there, but if you aspire to claiming any mavenhood on this subject, at least do read the description of the Penn Central litigation in the lower courts (the SCOTUS part has been commentaried on to death), plus footnote 56, and of course, our article’s Conclusion.

The Penn Central litigation is noteworthy for the largely unnoticed fact that of the three appellate courts that decided it, no two agreed on the nature of the legal issues being litigated, so each decided issue(s) that had nothing to do with the issues decided by the other two appellate courts. Honest, folks.

Anyway, it looks like we may get to see another chapter in the Grand Central terminal litigational wars — sort of like the Punic Wars. We can’t wait.


*     The kids running that law journal screwed up big time and mis-paginated the printed copy of the article; it starts either on p. 653 or 679. But since the article is, er, on the long side, you should have no trouble finding it in Volume 13 of the William & Mary Bill of Rights Journal. Do try.