The Real Deal New York

Talks to resolve bizarre Hudson Rise saga already sputtering, Kuafu says

Chinese firm claims Siras Development canceled first mediation session

August 17, 2015 05:15PM
By Rey Mashayekhi

From left: Saif Sumaida, Ashwin Verma, rendering of Hudson Rise and Shang Dai

From left: Saif Sumaida, Ashwin Verma, rendering of Hudson Rise and Shang Dai

It’s not quite King Solomon splitting the baby, but Siras Development and Kuafu Properties have attempted to resolve the heated dispute over their joint development of the Hudson Rise project in Hudson Yards by entering settlement negotiations — talks that have already run at an impasse, with Kuafu publicly criticizing Siras as uncooperative and evasive.

The ill-fated partnership behind the planned 47-story hotel and condo tower has been rife with acrimony, with numerous suits and countersuits filed between Siras, Kuafu and Blackhouse Development as they separately seek control of the 380,000-square-foot development.

Kuafu last month moved to acquire a $44.4 million project loan for Hudson Rise from UBS, claiming it was protecting the development from “loan to own” investors seeking to gain control of the property.

The New York-based Chinese private equity firm then filed to foreclose on the loan – a move that would potentially force a public auction of the property, in which Kuafu could submit a bid to purchase the site outright.

While describing Kuafu’s acquisition and bid to foreclose on the Hudson Rise loan as “an old-fashioned squeeze-out play,” Siras claims it has entered mediation sessions in an attempt to reach a settlement with the Chinese firm.

Siras, led by Ashwin Verma and Saif Sumaida, said it “will remain [Hudson Rise’s] lead developers” and is “pleased that Kuafu has agreed to try and resolve this dispute amicably through mediation.”

But when reached for comment on the negotiations, Kuafu said it is “quite bewildered by Siras’ comments” – noting that an “initial mediation session on July 30 was halted by Siras, and they then backed out of a scheduled date to resume the mediation.”

“While Kuafu remains open to a negotiated settlement, Siras’ actions indicate their inability to act in a cooperative and constructive manner and their desire to simply delay any resolution,” Kuafu added.

In February, Kuafu cited a “deadlock” between the sides with “no hope of reconciliation” in a petition to dissolve the partnership that was eventually dismissed by a judge in April.

Verma and Sumaida brought their own $50 million suit against Kuafu in March, claiming the firm had plotted to boot them from the partnership for months. Kuafu filed a counterclaim in May against Siras, accusing the firm of treating it as “dumb money.”

Not content to sit on the sidelines, Blackhouse head Sean Ludwig filed suit against Sumaida and Verma, claiming Siras closed the door on development deals they agreed to partner on. Kuafu also distanced itself from Blackhouse, saying in legal filings that Ludwig was not involved in the project due to “problematic behavior,” which included the jilted developer breaking into an ex’s apartment and drawing genitalia on her murals.