Report: How 1 East Village landlord stopped a mega-development from rising next door

News of the pending demolition of six buildings — 50-64 Third Ave. — on Third Avenue between 10th Street and 11th Street prompted some reader questions about the stalled development at 42-46 Second Ave.

As previously reported (first here), there were approved work permits for an 11-floor mixed-use building on the site of a former three-building parcel between Second Street and Third Street.

Gemini Rosemont Development was behind this 100,568-square-foot new building ... the development, using 42 E. Second St. for its address, included 88 residential units and 9,600 square feet for retail.

However, those plans are officially dead as the city moved to revoke the permits.

Earlier this month, The Real Deal took a deep dive into what happened:

All that stood in Gemini's way was a small-time landlord next door. Robert Proto, however, proved to be a big-time problem.

Proto made unceasing calls to officials for weeks, triggering an audit by the Department of Buildings that found code and zoning issues that had initially slipped past the agency.

Proto owns the building on the SE corner of Third Street — the last one standing on this Second Avenue block, not to mention the home of Proto's Pizza. 

Here are a few more details:

Proto's landmarked building was built in 1899 with brick with wood joist construction and rubble stone foundation walls, making it "fragile and highly susceptible to settlement and cracking," according to court records.

Gemini Rosemont brought in a hydraulic hammer to break up the foundation of the former church, shaking Proto's building violently, bursting heat pipes and water lines and flooding a retail tenant, he said. He filed a lawsuit last year alleging that Gemini Rosemont broke its construction agreement with him. The suit is pending.

Gemini Rosemont is reportedly moving on from the project. A rep told us previously, "The project is frozen, and we are currently evaluating options for the site." 

In 2020, Gemini Rosemont bought the former La Salle annex at 38 Second Ave. and Second Street. The $14.5 million purchase of the four-story building was the third of three contiguous plots they acquired. The Los Angeles-based commercial real estate investment company closed on 42-44 Second Ave. and 46-48 Second Ave. (the former Church of the Nativity) in March 2020 for $40 million. 

So they're out $55 million just for the properties, not including any other associated costs for the design and preliminary work on the lot. 

Still waiting for word on what might be next for the space. Whoever the new owner turns out to be, they must be made aware of the past development crisis here — and maybe even work with Proto on the project.

Speaking out which... back to The Real Deal:

Proto stopped the firm's project but says he's out $500,000 from legal expenses, engineering fees and damages to his building. He hopes to recover some of that with his lawsuit.

Yet he considers himself fortunate to have had the time and resources to defend his building.