Developer Isaac Katan may soon be out of the picture when it comes to the redevelopment of the Domino Sugar complex in Williamsburg, according to a story in yesterday’s New York Observer: “The developer of the Domino Sugar Factory failed to receive an injunction in State Supreme Court Tuesday to block its partner from recapitalizing the proposed $1.5 billion project. The decision appeared to clear the way for the Community Preservation Corporation [CPC], a joint owner of the site, to proceed with a deal to hand the majority stake to the project’s senior lender, Pacific Coast Capital Partners, LLC. Isaac Katan, who has been a fifty-fifty partner with CPC in the 11-acre former factory, had launched the suit in March seeking an injunction on the restructuring deal because it would significantly dilute both his and CPC’s interest in the project, which sits along the Brooklyn waterfront in Williamsburg.” CPC and Katan have made the news recently for being at odds with each other over plans for the redevelopment of the huge, waterfront property. Katan vows to fight on, so Williamsburg’s biggest would-be development may be on ice for quite a time to come.
Court Swats Down Lawsuit At Domino Factory Paving Way For Ownership Shakeup [NYO]
Photo by Dan Nguyen
Just recently there was news that the developers of Willimasburg’s massive Domino Sugar Refinery building into a huge mixed-used project heavy on housing were quietly shopping around the site. This morning, Crain’s has a story detailing just why the plans are far from being realized, and the bottom line is that the Katan Group is alleging in a lawsuit that Domino the firm’s partner, CPC Resources, has mismanaged the development process and played fast-and-loose with financing. Katan also wants to block the sale of the site to the lender, and CPC Resources is denying Katan’s charges. Here’s the legal back-and-forth and charges that the suit are based on:
“In 2004, CPC Resources and Katan acquired the site for $55 million, each contributing $10 million in capital to the deal, according to the court filing. A total of $65.5 million in financing was obtained from CPC Resources’ parent company, Community Preservation Corp., which provides financing for affordable housing development, and from Marathon Structured Finance. Since the acquisition, as the partner designated to oversee the development, CPC Resources has collected $25 million in fees for legal services, architects, unspecified consulting fees, environment fees and security for the development. CPC Resources “has effectively depleted all of Refinery’s available capital, while virtually no construction work has been performed,” the filing said, adding that the ownership is “devoid of operating budget.” According to the filing, that is despite the $20 million in capital put into the Domino project, the $25 million in fees collected since the start of the project, and the $120 million in financing obtained in 2007 to pay off the original lenders on the project. In 2009, due to the market collapse and uncertainty about the granting of zoning approvals for the project, it became clear that the effort would need additional financing, the filing said, but instead, CPC Resources began to negotiate with its existing lender, Pacific Coast, which in September 2010 extended its loan. Katan claims that CPC Resources refused to permit it to meet with Pacific Coast to negotiate terms.”
Meanwhile, the Katan Group also alleges that CPC rebuffed high offers from a couple firms looking to buy the site in favor of continuing to tango with Pacific Coast.
Domino Sugar Plans on Verge of Meltdown [Crain’s]
Photo by Loozrboy