The Real Deal New York

Joseph Brunner sues Ira, Irene Shapiro over 361 CPW

North Development boss says brother-sister team are demanding $10M they haven’t earned

March 29, 2016 03:04PM
By Ariel Stulberg

The former First Church of Christ, Scientist at 361 Central Park West

The former First Church of Christ, Scientist at 361 Central Park West

When is an approval not an approval?

That’s the crux of a new lawsuit filed by North Development Group’s Joseph Brunner against Irene and Ira Shapiro, the siblings from whom he bought the former First Church of Christ, Scientist on the Upper West Side in 2014.

Brunner’s suit alleges the Shapiros improperly sent him a letter of default on a $10 million, so-called “Approval Payment” he was to make.

That payment, according to the complaint, was contingent upon the brother-sister duo obtaining permission from the Landmarks Preservation Commission and the Department of Buildings for a planned condo conversion at the property.

Irene Shapiro bought the property at 361 Central Park West in 2014 through her Hartford CP Management, paying $28 million. She immediately flipped the building, selling it to Brunner for a reported $42 million. Brunner’s complaint, though, alleges that only $32 million was due at closing, with the Approval Payment making up the remaining $10 million.

Though Shapiro’s company successfully obtained Landmarks approval, the Department of Buildings denied the Light and Air Approval late last month, necessitating an appeal to the Board of Standards and Appeals, which is currently pending.

The provisions related to the Approval Payment stipulated that if Shapiro didn’t obtain the approvals within 18 months of the closing – late December 2015 – then the payment would be reduced by $2.5 million per month, according to Brunner’s suit.

The Shapiros allegedly sent Brunner a notice of default on the Approvals Payment, claiming that the payment was contingent only on applying for the city approvals, not actually obtaining them, Brunner claims in court filings.

“I will vigorously pursue the fee and contest the allegations against me, my brother Ira Shapiro and my company,” Irene Shapiro told The Real Deal in a statement. “I earned the approval fee under my agreement with the purchaser. My company, my brother and I acted appropriately in all respects.”

Brunner claims the Approvals Payment isn’t due, and in fact has already been whittled down to $2.5 million, three months having passed since the 18-month deadline.

Brunner is also asking a judge to force Shapiro to pay 50 percent of the costs related to obtaining the permits, as allegedly stipulated in the agreement, which to date they have “brazenly disavowed,” the suit claims.

The suit also alleges that Ira Shapiro – the original developer behind One Madison at 23 East 22nd Street, which went into involuntary bankruptcy protection in 2010, now working as a consultant for his sister’s firm – was, in practice, managing the project on behalf of Irene. The suit also seeks to make him an official party to the original agreement between the parties.

Brunner plans to convert the 47,000-square foot building into 35 luxury condo units. His attorneys didn’t immediately respond to a request for comment.

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