Major Upper East Side Corner Faces Demolition, Including Papaya King

UPPER EAST SIDE, NY — Take a good look at the corner of East 86th Street and Third Avenue, because its days may be numbered: a developer has filed plans to tear down the entire low-rise corner, which includes the flagship location of Papaya King.

The demolition plans for 171-179 East 86th St. were filed Tuesday by David Rothstein, an executive vice president at Extell. The megadeveloper is known for kickstarting the "billionaire's row" towers below Central Park, and for constructing a number of different buildings on the Upper East Side in recent years.

The site appears to include the entire one-story commercial strip on the northwest corner of Third Avenue and East 86th Street. Besides Papaya King on the corner, it was also formerly home to a Cohen's Fashion Optical, The Children's Place clothing store, and Wrap & Roll Grill — though nearly all of those businesses have closed in recent years.

The corner was purchased for $21 million last fall by a then-unidentified buyer, from longtime owners Imperial Sterling, city records show.

An Extell spokesperson did not respond to questions about its plans for the site.

At just 50 feet by 100 feet, the narrow corner lot is smaller than most sites that could accommodate a high-rise tower, and the company does not appear to have acquired any of the adjacent buildings — such as the next-door tenements at 1534-1536 Third Ave., home to Chick Fil-A and the Japanese restaurant Churutto.

Papaya King's court battle with landlord

At the time of last fall's purchase, there had already been signs of trouble for Papaya King — a unique eatery famed for its hot dogs and fruit drinks, which had been based on the corner of 86th and Third since its founding in 1932.

In 2020, then-landlord Imperial Sterling sued Papaya King's current owners, alleging they had taken over the shop without permission after the original Papaya King's lease was canceled due to unpaid rent. In April, attorneys for the building's new owner — apparently Extell, though it was identified under an anonymous LLC — requested to take over as plaintiff in the case, court records show.

But the case has remained tied up in court since then, as Papaya King's owners, Grab & Go Convenience, have "insisted on remaining in possession" of the building despite "monetary incentives to vacate," an attorney for the new building owner wrote in a letter to the judge in May.

An attorney for Grab & Go, meanwhile, contends that Imperial Sterling never had the right to sell the building to begin with, since it only had a 50-percent stake in the property. Failing to tell the court that the building was being sold until the deal was complete was an act of "deception," the store's lawyers say.

Since its opening 90 years ago, Papaya King has become an icon of the Upper East Side, spawned imitations like Gray's Papaya on the Upper West Side, and expanded to the East Village, Brooklyn and even Las Vegas — though all of those outposts have since closed.

Papaya King's phone number was not functioning on Wednesday, and its website appeared to be down.

If Extell's project moves forward, it would be only the latest low-rise Upper East Side block to be transformed by development, following nearby sites like First Avenue between East 79th and 80th streets (also an Extell project), Third Avenue and East 75th Street, and First Avenue and East 78th Street.

Have an Upper East Side news tip? Contact reporter Nick Garber at nick.garber@patch.com.