A Manhattan appeals court on Thursday put on hold one of NYCHA’s most ambitious and controversial projects, its plan to demolish and replace 2,000 units of public housing in the Fulton and Elliott-Chelsea Houses.

Supreme Court Justice David Cohen last month rejected a demand to halt the project by a group of tenants, joined by former state Sen. Tom Duane. The plaintiffs appealed, and the appellate division Thursday granted them a temporary stay until the appeal is resolved.

NYCHA’s board approved the project in September. In court papers, Jonathan Gouveia, the authority’s vice president for real estate development, said the project was expected to close this month.

In requesting the stay, the tenant group stated, “Without the requested relief (NYCHA) will close imminently on its plan to convert, demolish and redevelop Chelsea Developments which will render this action (on appeal) moot.”

Struggling to address decades of neglect that led to deteriorating conditions in its aging portfolio of 170,000 apartments, NYCHA has increasingly turned over management of its buildings to private developers under a program known as Rental Assistance Demonstration (RAD). 

In the scheme, the authority retains ownership of the properties, while the developers fund millions of dollars in upgrades in exchange for collecting rent paid by tenants and the U.S. Department of Housing and Urban Development through Section 8.

Since 2017, more than 40,000 public housing apartments have been placed in the RAD program, including the Fulton complex and Elliott-Chelsea Houses. The Related Companies and a firm called Essence Development planned to build both public and market rate housing on the site, place NYCHA tenants there in the new buildings and tear down the existing structures.

The suit to block the project argued that it did not go through the usual city land-use regulatory hoops. It demanded a preliminary injunction to halt the project and subject the plan to approvals by the community board, the Manhattan Borough President and the City Council.

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