The Real Deal New York

Brunner’s Bed-Stuy rental deal complicated by suit

Investor and his partner Mandel say seller “unjustifiably” claims they’re in default

August 31, 2015 01:30PM
By Mark Maurer Twitter_logo_blue copy

Fischer Bed-Stuy

From left: Karl Fischer and 1123 Myrtle Avenue in Bedford-Stuyvesant

UPDATED, Sept. 2, 8:25 p.m.: A lawsuit threatens to disrupt the sale of a Bedford-Stuyvesant development site slated for 196 rental units.

Joseph Brunner, Abe Mandel and Isaac Hager signed a contract late last year to pay $22.5 million for the site at 1101-1123 Myrtle Avenue, near Lewis Avenue. Hager, who is affiliated with Cornell Realty Management and North True Construction, had filed plans in December for a nine-story, 172,000-square-foot property to be designed by architect Karl Fischer.

Brunner and Mandel, who run Bruman Realty LLC, then filed a $35.5 million lawsuit in July against the seller, jeweler Simon Alishaev of Alishaev Brothers. They accuse him of “unjustifiably” claiming that they are in default under the terms of the contract, and of setting an unreasonable closing date.

Brunner and Mandel couldn’t be reached for comment, while Aaron Ambalu, lawyer for Alishaev, declined to comment.

Jeffrey Zwick, lawyer for the would-be buyers, claims they submitted a $7.5 million wire deposit. “We expect the seller to perform under the terms of the contract,” Zwick told TRD.

According to a stipulation filed Aug. 18, Alishaev agreed not to sell or enter a contract with another party until after Sept. 1. But he remains accused of breaching his contract with Brunner and Mandel.

Sources said Hager is handling the design and layout for the project. The site is comprised of three parcels – a one-story office-and-retail building and two vacant lots.

The buyers would pay roughly $131 per buildable square foot.

Alishaev has owned the parcels since 2009, when he paid $11.1 million, records show.

In addition to the residential component, plans also call for 19,000 square feet of commercial space, including a grocery store or deli on the ground floor.

No brokers are involved in the deal, sources said.

Brunner, who doubles as a developer and lender throughout Brooklyn, has been actively scooping up development sites of late. He bought seven buildings in Greenpoint for $317 per buildable square foot and, in partnership with Mandel, is in contract for two buildings in Williamsburg for a pricey $700 per buildable square foot.

Correction: A previous version of this story incorrectly identified the source of a quote attributed to the site’s owner.