When “Art” Strikes Development

Andrew Gibson co-authored the article with Antonia Krizanac, a third-year law student at Lewis & Clark College currently a law clerk at Stoel Rives.

A colorful 2018 legal case out of New York highlights a unique but potentially costly pitfall for owner-developers in connection with renovating old graffiti-strewn buildings.

The “5Pointz” buildings were a collection of run down warehouses located in Long Island City, Queens, New York City. The 5Pointz Owner had held the buildings for a long period of time but never developed them. Beginning in the 1990s, graffitists began to cover the exterior of the buildings with their graffiti art. In 2002, in an apparent effort to manage the graffiti murals, the Owner even put a prominent graffiti artist in charge as the de facto curator. The Owner and the graffiti artists never memorialized their agreement in writing but rather the Owner orally agreed to let the artists use the 5Pointz buildings until the Owner was ready to redevelop them.

In 2013, the Owner announced that he would demolish the 5Pointz buildings to make way for luxury condominiums. In response, 21 of the graffitists sued for an injunction to prevent the destruction of the buildings and their artwork. The Court initially denied any injunction, and before the Court issued its final opinion, the Owner destroyed almost all of the graffiti-laden walls by whitewashing them.

Litigation ensued under the Visual Artists Rights Act of 1990 (VARA) for destruction of the graffitists’ artwork. VARA is a seldom invoked statute that affords “moral rights” to certain visual artists for their works. These moral rights include the right to attribution and integrity of artwork. The right of integrity allows an artist to prevent any intentional destruction, mutilation, or other modification of its work. VARA deals both with works of art that can and cannot be removed, and it has been argued to extend to temporary works of art. In order for VARA protections to kick in, a work of art has to be of “recognized stature.” The law requires a two-tiered showing to come that conclusion: (1) that the visual art in question has “stature,” i.e. is viewed as meritorious, and (2) that this stature is “recognized” by art experts, other members of the community, or by some cross-section of society. The courts consider a variety of sources of information in these determinations.

In early 2018 following a three week trial, the Court found the Owner liable for VARA violations in whitewashing away the graffiti. The Court further awarded the maximum statutory damages, $150,000 per work, for a total of $6.75MM, as the Court found the Owner had acted willfully in destroying the graffiti murals by whitewashing them without further consulting the artists. The Court held that 45 murals were entitled to recognized stature and were therefore protected under VARA because the Owner and the artists never entered into any written agreement that waived those protections, the artists had no notice or opportunity to salvage their work prior to the destruction, and expert opinion provided that the graffiti garnered significant third-party attention and social media presence and thus were of sufficient “aesthetic stature.”

The Court keyed on the uniqueness of this situation and the Owner’s behavior in awarding the full $150,000 per work. The Court’s opinion noted the Owner could have waited to destroy 5Pointz for the ten months it took to obtain his building permits and given more time for a reasonable solution. The Judge characterized the Owner’s behavior as an “act of pure pique and revenge for the nerve of the plaintiffs to sue to attempt to prevent the destruction of their art.” The Owner’s actions, the Judge wrote, was the “epitome of willfulness,” and a key finding for the $6.75MM statutory damages awarded.

So, what’s an owner-developer to do if faced with a similar problem (other than not permit the graffiti to occur in the first instance)?

• Get it in writing. The Court in this case noted that while the Owner and graffitists all generally knew that the property would one day be redeveloped, they had not reduced that understanding to any writing waiving VARA’s protections. Thus, if/when permitting such street art on a building, an owner should set forth the terms as to the limited permanence of the work in question with a waiver of any potential VARA rights.
• Be reasonable in removal. If no waiver is in place an owner would be wise to follow VARA’s requirements for removal. VARA generally requires notice and an opportunity for artists to memorialize or remove their work. Had the 5Pointz Owner followed VARA’s procedures, he may have avoided liability and the steep fines.
• Be wary of unintended consequences. The 5Pointz Owner considered his permissive use and dismissal of graffiti as non-art determinative. The Court disagreed. The Court even went out of its way to compliment the artists on their artistic skills, demeanor in court and in dealings with the building owner. Always consider when the law of unintended consequences may strike next.

The 5Pointz legal case was titled Jonathan Cohen et. al v. G&M Realty L.P. et. al, before the U.S. District Court for the Eastern District of New York.

Originally published as “A case of New York City graffiti becoming art” on November 16, 2018, by the Daily Journal of Commerce.