A high-stakes legal dispute has erupted between fast-food giant McDonald’s and Michael A. Smith, the co-founder and former CEO of StreetEasy, over the ownership of a rooftop space utilized for a luxury penthouse in Manhattan. According to a report by the New York Post, McDonald’s claims ownership of the rooftop, which is part of Smith’s penthouse at 147 Reade Street.

Lavish penthouse at the center of the dispute

Smith, who earned $50 million from the 2013 sale of StreetEasy to Zillow, owns the upscale penthouse described in McDonald’s lawsuit as featuring four outdoor decks and a private swimming pool. The rooftop area, expanded in 2007, now spans approximately 3,700 square feet and sits atop the Tribeca, a five-story condominium complex built in 1987. This building also encompasses properties at 149 Reade Street, 165 Chambers Street, and 303-307 Greenwich Street.

McDonald’s claims rights to rooftop space

Court documents reveal that McDonald’s purchased four commercial units in the building in 1990 and secured several easements, including one that allowed the company to install a cooling tower on the rooftops of 147 and 149 Reade. The company utilized the space until 2006 when it upgraded to a new system that eliminated the need for rooftop access.

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In 2007, Smith obtained approval from the condominium board to expand his penthouse, which involved demolishing the portion of the rooftop covered by McDonald’s easement. McDonald’s argues that this expansion encroached on property it still owns.

Statute of limitations at issue

Smith’s attorney, Emily Reisbaum, pointed to a 2021 motion to dismiss, asserting that McDonald’s claims are invalid because the statute of limitations has expired. “The legal foundation of the case rests on events that occurred over a decade ago,” she stated in a comment to Bloomberg News.

Penthouse expansion and past allegations

Smith’s penthouse has been a source of contention before. In 2021, the condo board accused Smith, then serving as president, of misleading other unit owners about the scope of the penthouse expansion. The board alleges that Smith concealed key details of the project and is seeking at least $5 million in damages.

Smith’s career and legacy

A tech entrepreneur, Smith co-founded StreetEasy in 2006 alongside Sebastian Delmont, Doug Chertok, and Nataly Kogan. Following the company’s acquisition by Zillow, Smith held leadership roles in various tech firms.

What’s next?

As the legal battle unfolds, the case highlights the complexities of property ownership and easements in densely populated urban areas like Manhattan. Industry observers are closely monitoring developments in this high-profile dispute.