The Real Deal New York

O’Connor Capital owes $5.3M in UES condo work: contractor

Liberty Blue Group alleges it was wrongfully axed from Wellington conversion job

February 24, 2016 12:53PM
By Kathryn Brenzel

From left: Bill O'Connor and 200 East 62nd Street

From left: Bill O’Connor and 200 East 62nd Street

UPDATE, Feb. 24 at 1:05 p.m.: The company hired to perform renovations on an Upper East Side condo conversion claims owner O’Connor Capital Partners stiffed it on $5.3 million and then wrongfully fired the contractor.

Liberty Blue Group filed a lawsuit against O’Connor this week for allegedly kicking the contractor off large-scale renovations at 200 East 62nd Street, a 115-unit former rental property O’Connor bought in 2014 for $240 million.

The contractor accuses O’Connor of pinning the project’s delays on Liberty, when “all evidence demonstrates that [the] owner is the direct and proximate cause of any and all deficiencies.”

A legal representative for O’Connor, Frederick Cohen, said the lawsuit is meritless.

“We were just notified of the complaint, and it is without merit,” he said in a statement. “Construction at 200 East 62nd Street continues to progress and our schedule of delivery remains unchanged.”

Liberty could not be reached for comment.

O’Connor hired Liberty in January 2015 to renovate all apartment interiors and upgrade common areas in the building, also known as the Wellington. In the contract, Liberty guaranteed the cost of the work would not exceed $26.2 million, the lawsuit states.

In a letter dated Feb. 12, the developer said it fired Liberty for failure to “properly progress the work,” “furnish complete financial information,” and “perform and complete the work with the required quality of workmanship,” according to the lawsuit.

Liberty, founded by former Dermot Company staffers Michael Hyman and Florim Lajqi, claims it’s owed $5.3 million for the work performed, alleging that O’Connor failed to provide adequate drawings, specifications and information on apartment units slated for construction. O’Connor issued “conflicting direction,” the suit says.

Four days later after being booted, Liberty filed 15 liens for a total of about $4.8 million on several apartment units in the building.

O’Connor bought the 241,000-square-foot rental building from pension fund CalPERS and financial firm GID in March 2014, tapping the Blackstone Group’s debt platform to finance the $240 million acquisition.

Dusica Sue Malesevic contributed reporting.

Correction: A previous version of this story incorrectly stated the leadership of O’Connor Capital Partners. Glenn Rufrano is now CEO of American Realty Capital Properties.