accept overnight guests because it was "losing a lot of money", although long-term guests would be allowed to stay for at least six months. At the time, room-occupancy rates in New York City's hotels were declining. Tishman razed the buildings on Third Avenue, but could not proceed further until existing tenants had been relocated. The New York Telephone Company agreed to lease in the proposed building on the condition that all of the hotel's existing residents be relocated, but Tishman was unable to relocate the remaining tenants. Tishman then proposed constructing two smaller buildings, one each on Third Avenue and Lexington Avenue, separated by a park; this plan was also controversial. Concurrently, the Metropolitan Transportation Authority considered developing a terminal for the Long Island Rail Road on the site as part of its Program for Action. The city government rejected Tishman's plan for a 52-story skyscraper in June 1974. By the mid-1970s, the Shelton had 26 tenants, all of whom lived in rent-controlled units. Some of the residents agreed to relocate and were each paid between $15,000 and $17,000. The 11 remaining tenants sued Tishman in July 1974, accusing Citadel of neglecting the building by failing to replace a broken boiler in the basement. Tishman sold the eastern quarter of the site to New York Telephone in October 1974. The hotel's tenants remained in place, and the other buildings on the block contained about 100 tenants in total. Cancellation In December 1975, Tishman officially canceled its plans for the tower and relinquished the site to Avon Associates, a firm operated by Goldman and the DiLorenzo estate. According to Tishman's president Robert Tishman, the project was no longer financially viable due to the 1975 New York City fiscal crisis and the presence of the holdout tenants. The company had spent $3 million to maintain the Shelton Towers during fiscal year 1975; some of this money was used to pay the salaries of 11 staff members and a 24-hour security detail for the remaining tenants. Except for a middle-aged secretary, all of the remaining tenants were elderly; six of the eight holdouts were women. Tishman paid Goldman and the DiLorenzo estate $1.8 million, and Goldman and DiLorenzo transferred the hotel's title to the Dollar Savings Bank. The bank, in turn, would cover the hotel's expenses, which included $225,000 in annual taxes and up to $5,000 in monthly heating costs. Tishman had sold