A group of residents and community groups said yesterday they intend to sue to stop development of a planned 23-story luxury tower at 626 Flatbush Avenue in Prospect Lefferts Gardens. The suit against New York State Housing Finance Agency and developer Hudson Companies Inc. contends that more than $72 million in public funds were approved for the development without a “proper environmental impact study as required by state law,” according to a press release sent out by the group.

“The building in Prospect Lefferts Gardens would be in the midst of a neighborhood that is otherwise largely comprised of six-story or smaller buildings, and would present serious economic and environmental issues for the historic neighborhood,” the release continued.

The group includes the Prospect Park East Network, Flatbush Development Corporation, Flatbush Tenant Coalition and Prospect Lefferts Gardens Neighborhood Association, among others. The group plans to hold a press conference to announce its lawsuit Thursday at 11 am in Chester Court.

The development by Hudson Companies is as-of-right, which means it complies with all existing zoning regulations and does not need any special permits or variances.

Rendering via Hudson Companies


A lawsuit over payment has supposedly brought construction at City Point in downtown Brooklyn to almost a complete standstill, according to a story in New York Yimby. According to an anonymous source quoted by the publication, 120 workers walked off the site November 11 in connection with the suit. The blog also alleges that City Point’s developer, Albee Development, has failed to pay several contractors involved in the project.

Everything started when Albee replaced its concrete contractor, Casino Development, with another contractor earlier this month. Afterward, Casino filed suit against Albee disputing its payment and alleging that the developer had prevented Casino from removing its equipment, including more than $1,000,000 in steel framework.

City Point spokesperson Tom Montvel-Cohen told us that the workers had not “walked off” at City Point but had left because the contractor was replaced. Albee removed Casino from the project because the contractor did not meet agreed-upon construction milestones, he said. He also said that City Point is not delinquent in paying any of its contractors and that “erection of steel and masonry are proceeding without interruption.”

This is not the first lawsuit City Point has dealt with. In May, a group of unions, politicians and community groups sued the city and the developer over allegedly low wages. The suit was dismissed in October.

Legal Issues Halt City Point’s Phase II [NY Yimby]
Rendering by CookFox


Some investors are suing some developers for fraud concerning an unspecified address in Williamsburg, according to an item that appeared in publication Law360 and was picked up by The Real Deal.

We searched public records and found the LLC is connected to three addresses on one block, one of which, 195 Berry Street, above, is part of a complex along North 4th Street between Berry and Bedford where Whole Foods is supposed to be locating. That particular site has been stalled for years, although recently we noticed the roof had been removed.

The lawsuit by financial backers Cornwall Management and Russian investor Oleg Soloviev alleges that developer North 3rd Development, hedge fund Thor United, and Atlant Capital Holdings purposefully misled the investors to defraud them of $2.2 million by defaulting on their loan agreements, then arranging a short sale of the property to a company controlled by one of the developers. The suit asks for $3.6 million.

The entity North 3rd Development is connected with 195 Berry, 248 Bedford, and the townhouses at 129 North 3rd Street, according to PropertyShark. The Real Deal specifies that the property in question is a “$119 million residential project.” Anyone know more?

NYC Developers Bilked Investors in $119M Project, Suit Says [Law360]
Williamsburg developers Sued for Fraud in $119M Project [TRD]
Roof Gone at 193 Berry Street [Brownstoner]
Big Deals in ‘Burg [Brownstoner]


The condo board of 96 Rockwell Place has filed a lawsuit against the building’s developers in New York State Supreme Court because the building has no permanent certificate of occupancy. The conversion of the former piano factory was finished in 2009 and a temporary c of o expired in July, according to a story in The Real Deal. “The lapsed TCO has all but halted the ability of the condominium’s residents to sell, refinance, [or] obtain homeowner’s insurance, but even worse, may have caused many unit owners to default on their mortgages,” said the suit. The building was converted by Joshua Landau and Eric Derector. “The sponsor’s interest is, and always has been aligned with the condominium board,” said Landau said in an email to The Real Deal. “The Department of Buildings has granted numerous TCOs in the past for the premises and we are working diligently to resolve any additional requirements they may have. We expect the matter to be resolved as soon as possible.” In July, New York Attorney General Eric Schneiderman told the developers to offer to let buyers out of their contracts, after the condo board complained about construction and financing problems with the building.

Fort Greene Condo Board Sues Over Missing CofO [TRD]


In spite of a court order and in the middle of a terrible heat wave, Long Island College Hospital is sending the last of its patients elsewhere and plans to close over the weekend, according to multiple reports. SUNY issued another closure plan late Wednesday, ordered staff to discharge any remaining patients, and told doctors to expect termination letters, according to The New York Times. Meanwhile, the hospital is near empty but staffed and losing $15,000,000 a month, mostly in salary. SUNY said it is not violating the court’s temporary restraining order because it has filed an appeal and therefore no restraining order is in effect, reported Crain’s. Nurses said emergency response times are slower “because ambulances have been lined up at Methodist Hospital in Park Slope trying to unload patients there,” according to the New York Post. “I spoke to a woman yesterday whose mother waited two days to be seen at Methodist Hospital because they were so backed up,” the paper quoted a paramedic as saying. The closure has bigger ramifications, according to the Times: “The hospital’s grim fate illustrates how health care is changing in New York and in the country, as hospitals confront seismic changes in patient care and how it is financed.” But perhaps more to the point, as the Times also said: “The huge red brick building in Cobble Hill stands on the border of Brooklyn Heights, with sweeping views of the Manhattan skyline that make it more valuable as a real estate development site than as a medical center.”


It’s a situation likely to repeat itself as the Bushwick lofts area becomes increasingly popular and valuable. The residents and landlord of 13 Thames Street have been fighting for years over the use of a factory space that is not zoned for residential. The tenants, some of whom identify as anarchists and frequently held arts events in the space, were ordered to vacate last year. Now the new owner of the building has applied for a liquor license for a bar in the contested space, according to DNAinfo. The tenants had applied for protection under the loft law that went into effect in 2010, and they sued in January to be allowed back into the building. The order to vacate was for “illegal obstruction of the entrance” and for operating a “nightclub” in the building, according to the DOB. The building was also in the news last year when tenants claimed the landlord had hired a biker gang to harass them. The police have raided the building at least twice, in one case in search of people who were broadcasting live video of Occupy Wall Street protests. The new loft law provides a path for renters of industrial space to legally live there. It passed with the backing of the former State Assemblyman Vito Lopez, who has been extremely influential in housing in Bushwick and throughout New York City. The City considers the Bushwick industrial area “East Williamsburg” but locals have called it Bushwick since at least the early 20th century.
Sued Building Owners Want to Replace Evicted Tenants With Bar [DNAinfo]
Photo by PropertyShark



The Communication Workers of America last week released a report condemning Cablevision’s Internet service in Brooklyn. In many Brooklyn neighborhoods, Cablevision is the only option for cable Internet service. Cablevision’s approximately 300 technicians and dispatchers in Brooklyn are members of the CWA. The report contends that service in Brooklyn is significantly slower than Cablevision’s service in the Bronx, based on testing data, and that Brooklyn is dotted with faulty and outmoded equipment. The report claims Cablevision is purposefully “leaving Brooklyn behind” to break the union. Above, a photo purportedly showing some broken cable equipment held together with duct tape and hanging no higher than six feet off the ground at 2022 Jerome Avenue in Brooklyn, according to CWA. In December, before the report came out, Cablevision sued CWA for defamation, saying the union was making false claims about the speed and quality of its service in Brooklyn, New York Business Journal reported.
Photo by CWA


Will the Domino drama never end? The Commercial Observer reports that the Katan Group, an owner of the 11-acre development site, is suing to block the $180 million sale of the site to Two Trees. (Two Trees signed the deal this June, and even then the Katan Group was making noise about the price being insufficient.) Katan is accusing CPC Resources, the development partner, of ignoring a bid from developer Joe Chetrit, ignoring higher bids of $190 and $200 million from two other firms, and of not conducting a proper sales process for the site. The suit also says Two Trees was given an extended closing time, despite the current owners’ mortgage accruing at $1.5 million per month. As The Commercial Observer sums it up: “Katan is seeking to nullify the blockbuster sales deal to Two Trees and terminate CPCR’s control of the sales process of the site as managing member of its partnership with Katan.”
Katan Sues To Block $180 Million Domino Deal [The Commercial Observer]
Confirmed: Two Trees In Contract To Buy Domino [Brownstoner]


Yesterday the NY Post reported that the condo board at Dumbo’s Beacon Tower filed a $150 million lawsuit against building developers for mail fraud committed after the building received its temporary certificate of occupancy, not to mention nearly 100 construction complaints. Those include “countertops that are too high, parapet walls that are too low, improperly placed sprinklers, water leaks and unsafe windows.” Even worse, the light supposed to radiate from the Beacon’s “curvilinear louvered top” (giving the building its name!) has gone out and there is no way to fix it. Beacon, no more. As Curbed pointed out, there are two resale units currently on the market whose sale prospects now look grim.
Beacon Dark [NY Post]


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