This is the second story in a three-part series. Read part one of our investigation here, and our methodology here.

Late on the night of December 2nd, 1934, a 22-year-old Indiana college student named William Pattison drove his car through the gates of Gramercy Park. Flattening the wrought iron fence at the perimeter and savaging the shrubbery, Pattison circled the statue of Edwin Booth at the park’s center before driving off.

One might have expected disapproval from the papers. Instead, the Brooklyn Daily Eagle declared Pattison “the champion of all gate-crashers” as it recounted, with obvious glee, his joyride across the “sacrosanct park lawns, where only babies and poodles are supposed to tread.” They gloated that he didn’t need one of the park’s famous keys that night, only “a Ford car, going fast.”

The paper’s view of Gramercy — snobbish, exclusive — survives in some circles today. Broad City mocked the park’s exclusivity last year in a clip entitled simply, “Gramercy Park Douchebags.”

A plaque mounted on the gates surrounding Gramercy Park (Jessica Lehrman / Gothamist)

The residents of Gramercy owe their good fortune to one man, a real estate speculator named Samuel B. Ruggles, who struck a sweetheart deal with the city early in the 19th century.

Ruggles was born in New Milford in to a well-established Connecticut family. He was tall for his time, with a jutting nose and fair hair, a wan lock of which is preserved, tied with ribbon, among his papers at the New York Public Library. His close friends called him Sam. He arrived in New York around 1821, and, after a mostly undistinguished legal career, turned his attention to real estate.

Over a fevered nine months in 1831, Ruggles purchased the 23 separate parcels of swampy land that would one day become Gramercy Park. The land was relatively cheap; that part of Manhattan, north of 20th Street, was then still nearly rural, dappled with rocky copses and swaths of marshland. But New York was a city undergoing dramatic transformation.

A certificate to "Gramercy Farm" dated 1831, the year of Gramercy Park's founding, in Samuel Ruggles' papers stored in the New York Public Library (Madeleine Crenshaw / Gothamist)

“There’s a huge population boom and a housing crunch,” at that time, said Catherine McNeur, author of “Taming Manhattan: Environmental Battles in the Antebellum City.” The Erie Canal had just opened, bringing a flood of economic development, and newcomers following behind. “A lot of farmers’ kids are moving into the city, and immigrants are coming from overseas as well.”

In the decade between 1820 and 1830, the Board of Assistant Aldermen (the precursor to the City Council) noted that year, New York’s population had surged by 60 percent. Waves of mostly poor Irish and German immigrants filled the slums of lower Manhattan, pushing the city’s gentry steadily uptown, and even across the river into Brooklyn.

“The city is trying to cement New York’s elite neighborhoods, so people don’t leave,” McNeur said.

While the wealthy caste was putting down roots at the edges of the city, Ruggles’ spread, situated at the northern terminus of dense development, was primed to skyrocket in value. But he was mindful of the overcrowding that he saw creeping up the island. No matter where on the island one built, the city was soon to follow.

With that overcrowding in mind, Ruggles hit on a plan that would allow him to develop his land, but still preserve some open space for the well-off residents who would live on it. He would divide his now very large property on 20th Street into a series of lots, building homes on each; at the center, he would fence off and preserve a “square” or “park” that would be reserved for the use of surrounding property owners.

A lock of Samuel Ruggles hair lies among his papers stored at the New York Public Library (Madeleine Crenshaw / Gothamist)

Ruggles had something of a civic mind. He would go on to be a state representative in Albany, and he thought of himself as the kind of businessman who looked to the betterment of the whole. In his view, his planned park, while it was always intended to be private, would nonetheless provide a great benefit to the community, by securing a plot of open space in an increasingly crowded urban environment. In other words, the mere existence of unbuilt land, he believed, even if it was behind an iron fence, would be beneficial to all.

If that sounds strange today, it would have been axiomatic in Ruggles’ time, explains Clemson University professor Robert Hewitt. In the 1830s, the now-discredited notions of “miasmatic theory” held sway; overcrowding, and especially “stagnant air,” were thought to be responsible for all manner of disease in an urban environment. Air flow, by contrast, facilitated by open space, was thought to promote health.

“Rural areas were considered by all to be healthier than urban areas,” Hewitt explains. Leaving land unbuilt upon, and planting trees and other vegetation, was thought to prevent disease. “The idea of bringing something of the landscape into an urban condition was something that, just by itself, was supposed to impute a certain kind of health.”

Because Ruggles viewed his park as a kind of gift to the city’s people, he decided to make a somewhat audacious request to municipal leaders: he wanted them to grant his private park tax-exempt status. It was a benefit contemplated to last “forever hereafter,” in the words of the original deed, and the contemporary property owners would pass the park down through history “in trust.”

Ruggles’ proposal is detailed in a report, dated December 5, 1831, to the Board of Assistant Aldermen. Written by William Van Wyck, a member of that board, it lays out Ruggles’ case on the developer’s behalf. It’s preserved on brittle microfilm in city archives.

The city was filling up fast, the report warned. (The kinds of people who were filling it was left unsaid, but likely would have been readily understood.) Keeping Ruggles’ park unbuilt upon, “so as to admit the free circulation of air,” the report argued, would “promote the health and convenience of [the city’s] inhabitants.” And granting his park tax exempt status would encourage this kind of altruistic planning by developers to come.

"Unveiling of statue of Edwin Booth as Hamlet, Gramercy Park, 1913" from the Billy Rose Theatre Division, The New York Public Library. The New York Public Library Digital Collections.

Ruggles gave his park the name “Gramercy,” a corruption of the Dutch krom moerasje, meaning “crooked little swamp,” a name that had historically been applied to the area. The name was apt, given the marshiness of Ruggles’ plot. It may also point to a bit of marketing spin on the developer’s part.

The report describes Ruggles’ park as being located on “high and salubrious ground” which was not a very accurate description, it turns out. As Hewitt explains, advertising the place as a former swamp would have been problematic from a business standpoint. Doctors at the time were routinely hired to perform “medical topographies” of land before development to make sure that it was, in fact, salubrious, and few places were viewed as being more laden by “miasma” than wetlands. If Ruggles had advertised his land as what it was, Hewitt said, “I think people would have avoided it, literally, like the plague.”

The private park would drive up the property tax assessments of any properties bordering it, and the additional value—the report predicted the worth of such parcels would “double” — would mean the city would derive far more in taxes on the adjacent properties than it ever would from taxing the park land itself. char

What the proposal represented was, in effect, a kind of developer subsidy. And it all might have been a hard sell in a town that was growing far faster than it could afford. A good portion of the proceedings of the Board of Aldermen at the time were devoted to the recovery of tax payments. They were loath to give any away.

But fortunately for Ruggles, when he approached the board with his plan, he encountered familiar faces. He may not have been part of the old Dutch aristocracy, but with help from his father, Ruggles had quickly ingratiated himself to New York society when he’d arrived a decade earlier, according to “Ruggles of New York,” a biography published in 1946.

So the men in a position to approve his plan — and they were all men — were his social peers. They dined together and belonged to the same clubs. They ran in the same political circles. And within a few months of Ruggles’ proposal, lawmakers agreed.

The developer had his tax-exempt park, and even won conditions that subjected the surrounding properties to a long list of prohibited uses. No “manufactory of gunpowder, glue, varnish, vitriol, ink or turpentine” could be operated on the 66 lots. Nor could any “public museum” or “theatre.” Despite those prohibitions, McNeur notes, “theatrical clubs and other banned establishments did eventually surround the park.” Even today, the National Arts Club holds free public art exhibits, much like a museum.

Ruggles painstakingly leveled and cleared the marshy land, built homes, and sold off parcels to some of New York’s most prominent residents. Fishes and Astors and Stuyvesants began to settle in. As railroads barons and governors got comfortable—building stables and marble ballrooms and creating some of the city’s then-largest homes—Gramercy took its place among the most desirable addresses in Manhattan, and maybe the world.

"Gramercy Park, nos. 3-5, Manhattan," Berenice Abbott, 1935, from The Miriam and Ira D. Wallach Division of Art, Prints and Photographs: Photography Collection, The New York Public Library. The New York Public Library Digital Collections.

Then Seth Low, a crusading progressive mayor, was elected in 1902, with a mandate to shore up city finances and slay the Tammany Tiger. Among the initiatives of the new government, as detailed in a 1902 report from the Department of Taxation and Assessments, was a reevaluation of tax exempt land, and the revocation of exemption in cases that didn’t provide “a direct and positive benefit to all the people.”

According to court records obtained at the New York State Library, the Department of Finance had assessed Gramercy Park in the 1890s at $100,000, around $3 million in today’s dollars, and the trustees had just paid the taxes rather than litigate the issue. But in 1903 the City increased the value to $750,000—or $17 million. The trustees demanded that it be lowered back to $100,000; Finance dropped it to $500,000, so the landowners sued.

The value of using the park was already built into their market values, so they shouldn’t be taxed twice, the key holders pleaded. Besides, Gramercy Park was created with restrictions that prevented it from being developed, so technically it was all but worthless on the open market.

Nearly seven years of litigation ensued; a parade of real estate agents sat for lengthy depositions. One was asked whether he believed the park was worth more in the summer than in the winter. “Not for a minute,” he replied. “I passed there yesterday and the sidewalks were full of children being drawn on their sleds.”

The judges sided with the keyholders. “Can’t Tax Gramercy Park” read the headline in The New York Times on June 25, 1910. A spokesperson for the City’s Law Department confirmed that they haven’t challenged the ruling since.

“The argument that I think persuaded these courts is, well all right, the city is going to lose tax revenue on the park but it’s already gained the equivalent tax revenue by increasing the valuation of the neighboring properties to reflect the fact that the park is essentially a front yard,” said Stewart E. Sterk, the director of the Center for Real Estate Law and Policy at Cardozo Law School.

Gramercy Park, circa 1905-1908. (Courtesy of the Museum of the City of New York; X2011.34.3341)

The most recent challenge to Gramercy Park’s status occurred in 2001, after a group of students from nearby Washington Irving High School—many of them Black and Latino—were visiting the park as guests of the National Arts Club, which has a key to the park. Seeing the group, a trustee allegedly told their chaperones repeatedly that “the Park is not for these kinds of kids,” and called the police. In a separate visit, a group of ten-year-olds from Roosevelt Island began playing with a ball in Gramercy Park when, according to a federal lawsuit filed by the students and the Arts Club, a gardener told them, “There’s no fucking ball playing in this park.”

In addition to claims of racial discrimination, the lawsuit also argued that the Gramercy Park Trust violated New York’s common law Rule Against Perpetuities, and that Gramercy should be given back to Ruggles’ heirs or be opened to the public.

United States District Judge Gerard Lynch scolded the parties for using children as proxies in their “intercine battles for control of the board of trustees,” and urged them to settle. (A New York Magazine story from the time detailed the “tug-of-war” between the Trustees and the National Arts Club.) He also rejected the Perpetuities argument as irrelevant and out of his jurisdiction, writing that it would “involve the property rights of hundreds of people who currently have a beneficial interest in the Trust, and ultimately the disposition of a virtually priceless piece of Manhattan real estate.”

The parties eventually settled, and the children received around $30,000 each.

Bill Samuels, a businessman who funded the lawsuit against the Trust, said both sides spent a million dollars each litigating the case.

“We asked for $15,000 per kid, we asked that there be two academic school visits per year,” Samuels said. “At some point we thought we had a settlement, the school board asked that one of the school visits be on Martin Luther King Day. The minute that happened, all negotiations ceased. We were told there would never be a MLK Day in this park.”

Samuels said that instead the Trust offered a different deal, the one that was eventually accepted: more money, no school visits.

(Arlene Harrison, a Trustee and the president and founder of the Gramercy Park Block Association, did not respond to multiple requests for comment.)

“They all perceive that [Gramercy Park] adds value to their apartments,” Samuels said of the key holders. “And as a result, they fought fiercely, they collected a million dollars in legal fees and were willing to pay the kids triple what we asked for, if they did not have to grant two days a year for public school kids to enter the park.”

Samuels added, “The kids ended up doing fine, but the lawsuit failed because the leaders around the park felt so strongly about protecting their property rights.”

If Gramercy Park property owners are getting a free ride, how can we fix it? Stay tuned for the third and final story in our series.