The Daily Dirt: Billionaires’ Row developer secures legal win (again)
111 West 57th Street (Credit: iStock)
The legal saga of this Billionaires’ Row tower continues, but the developers just scored another victory.
A federal appeals court threw out a RICO claim against developers and lenders at 111 West 57th Street, affirming a lower court’s October decision, David Jeans reports. AmBase Corporation, which provided $65 million equity to acquire the development site, has lobbed a total of four complaints in federal and state courts against JDS Development Group, Property Markets Group and Spruce Capital Partners alleging, among other things, that the partners conspired to squeeze AmBase out of the project.
\After the development team defaulted on a $725 million construction loan from Apollo Global Management and AIG in 2017, Spruce bought a $25 million junior mezzanine stake and foreclosed on the project. Spruce subsequently brought PMG and JDS back on as the project’s developers.
In May, AmBase accused JDS, PMG and Spruce of a “corrupt agreement” to eliminate the firm’s stake in the project. That lawsuit is ongoing. Tuesday’s federal appeals court decision backed up a lower court’s dismissal of AmBase’s RICO claim, finding that the firm didn’t show that the actions of JDS, PMG and Spruce represented a “threat of continued criminal activity.”
The project has been plagued by other litigation. Last year, Corcoran Sunshine accused the sponsors of sabotaging the project and purposely stalling sales in the building. The firm was ultimately replaced by Douglas Elliman, which is now heading sales at the tower.
Apparently, a pet store doesn’t make a good neighbor.
Tenants of a second-floor apartment at 10 Madison Square West claim that due to a defective industrial sewer vent gas pipe, smells of “rodent excrement and urine, tropical fish excrement, reptile excrement and bird excrement,” drift into their home. Yikes.
The Kahn family — who pay $11,000 a month to live in the apartment — filed a lawsuit against the condo unit’s owner, the building’s developer (the Witkoff Group) and the tower’s property manager (Douglas Elliman), Mary Diduch reports. The smells allegedly are wafting through a gas pipe from PetSmart, which has rented the retail portion of the building on the ground floor since April 2018.
In addition to noxious sewer gases seeping into the apartment through its air conditioning vents, the unit’s sinks, toilets and shower also flooded and caused damage to the home. The Kahn’s are seeking $3 million in damages.
What we’re thinking about next:
CLOSING TIME Residential: The priciest residential sale recorded on Tuesday was for a townhouse at 19 Tompkins Place in Cobble Hill, at $4.5 million. Commercial: The most expensive commercial sale of the day was for an apartment building at 400 West 113th Street in Morningside Heights, at $57 million. The Brodsky Organization is the buyer, and Cathedral of St. John the Divine is the seller.
BREAKING GROUND The largest new building filing of the day was for a 34,360-square-foot residential building at 36-35 31st Street in Astoria. Ellen Senisi filed the permit application.
NEW TO THE MARKET The priciest residential listing to hit the market on Tuesday was for a condo unit at 80 Columbus Circle in Lincoln Square, at $13.8 million. Irina Levieva of Ostrov Realty has the listing. — Research by Mary Diduch
A thing we’ve learned… There’s a good reason why Blackstone and BlackRock have confusingly similar names. BlackRock actually got its start as a subsidiary of Blackstone, which was called Blackstone Financial at the time. When Larry Fink of Blackstone Financial decided to branch out on his own, he and Blackstone CEO Steve Schwarzman agreed that the name of his new operation should keep “black” in the name, according to CNBC. Fink considered “BlackPebble” before settling on BlackRock. I guess “BlackBoulder” would’ve created tension between the two. Anyway, thank you to Georgia Kromrei, who spotted this tidbit.
Top stories from our other markets:
The e-commerce industrial revolution has arrived for Thor Equities. After spending years as a champion of brick-and-mortar stores, the firm is launching a new business called ThorLogis that plans to spend $900 million on purchasing and developing logistics properties, according to the Wall Street Journal. It is already at work on two sites in Red Hook, Brooklyn and the Netherlands.
CHICAGO For years, Churchill Downs Inc. said that the historic Arlington Park racetrack would need slot machines and table games to survive. But when the long-awaited legislation materialized in late June, it was not quite what Churchill Downs wanted. Now, the company has decided not to seek that casino license for the historic Arlington Park racetrack, it said in a release last week.
LOS ANGELES Los Angeles industrial giant Rexford Industrial Realty has added nearly half a million square feet of industrial space to its portfolio. The Westside-based real estate investment trust picked up five properties for $110.3 million and sold off two others for $12.8 million, it announced this week. The properties acquired a total 488,000 square feet. Rexford is one of L.A.’s most active industrial investors. The firm focuses almost entirely on infill properties and more specifically on warehousing and logistics facilities.
MIAMI Most general contractors are back to work in South Florida, after securing and shutting down their job sites last week in anticipation of Hurricane Dorian’s arrival. While South Florida escaped the storm’s wrath, developers and contractors saw their costs rise as the days ticked by. In South Florida, after developers and builders worked to lock down their construction sites, in some cases bringing down cranes late last week, they began returning to normal on Tuesday. The slow-moving storm paralyzed cities and towns in its path.