The Real Deal New York

Suit claims prominent affordable housing developer took funds

Investment partners say Eric Anderson spent money on personal projects

October 08, 2014 10:00AM
By David Jones

340 Pleasant Avenue and Eric Anderson

340 Pleasant Avenue and Eric Anderson

One of the city’s leading affordable housing developers, Eric Anderson of Urban Green Builders, is facing a $1 million lawsuit filed by his own investment partners who claim he misappropriated funds from his properties in the Bronx and Upper Manhattan.

The partners, including Hamilton Heights Cluster Associates and several other firms, allege in the Oct. 6 suit filed in Manhattan Supreme Court that they voted Anderson out as managing agent for the buildings. That vote came amid claims that Anderson misappropriated funds for 13 rental and mixed-use buildings. The suit alleges that Anderson spent the money on his own real estate and personal projects.

The suit also claims that, following the vote to switch from Urban Green Management to another firm, Anderson ordered two building supers to send notices to tenants instructing them to continue sending rent payments to him. In addition, the court filing alleges that Anderson carried employees on the company payroll who did most of their work for his restaurant and other real estate projects unrelated to Urban Green.

Anderson was either the managing partner or a leading investor in all of the plaintiffs’ firms and managed all of the properties. In May, his own business partner allegedly was told by former employees that Anderson was charging 12 percent management fees. That’s four times the normal amount at many firms, according to the suit.

Urban Green Builders has been in business for about 15 years, previously operating under the name A&F Commercial Builders.

According to court filings, Hamilton Heights Cluster Associates owns five buildings in Upper Manhattan with eight commercial and 86 residential units. Another plaintiff in the case, Pleasant Avenue Associates, owns two five-story buildings with a total of 10 residential apartments and two commercial units, located at 328 and 340 Pleasant Avenue. The remaining plaintiffs own one building in Manhattan and five buildings in the Bronx.

Katherine Daniels, attorney for the plaintiffs, did not return calls. Anderson could not be reached. Attorney Russell Kivler, listed on court documents as the attorney for Urban Green Management, declined to comment, but said he is not representing Anderson in the case.

A court hearing is scheduled for Oct. 15 to determine whether a restraining order should be issued to freeze the bank accounts for the properties and block the defendants from contacting tenants or any building employees.

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