The Real Deal New York

LIVWRK, FirstMark sue Samson over Gowanus warehouse deal

Developers claim landlord refused to release partial payment in $73M sale

June 22, 2016 12:50PM
By E.B. Solomont and Kyna Doles

Rendering of 92 Third Street in Gowanus (credit: LIVWRK) (inset: Asher Abehsera)

Rendering of 92 3rd Street in Gowanus (credit: LIVWRK) (inset: Asher Abehsera)

UPDATED, July 11, 9:20 a.m.: After paying $20 million for a Gowanus warehouse in 2014, LIVWRK and FM Capital were poised to reap the rewards of their redevelopment when they sold the property to Samson Management last year for $73 million.

But in a new lawsuit, LIVWRK and FM Capital claim that Samson is refusing to release $6 million in escrow funds — part of the payment they’re allegedly owed for the sale of the newly renovated office building at 92 3rd Street .

LIVWRK and FM Capital are seeking $6.3 million in damages, according to the suit, filed Tuesday in New York State Supreme Court.

Under terms of the sale, Rego Park-based landlord Samson, led by Sam Goldstein, agreed to keep $6 million in escrow until LIVWRK and FM Capital completed construction on the property, the suit said.

In particular, the developers were required to complete tenant build-outs, fully renovate the property and obtain a temporary certificate of occupancy for the building, according to the suit.

LIVWRK and FM Capital completed the work in March, when they sent a letter requesting the release of funds to Samson’s escrow agent, Goldberg Weprin Finkel Goldstein LLP. But Samson, through the law firm, was “obstinate” in its refusal to pay, the suit said. The two parties exchanged a flurry of letters over the next month in which Samson asserted “increasingly unreasonable and needlessly provocative positions.”

In a statement, Samson said 92 Third was an “unfinished building” at the time of the sale. “Under the escrow agreement, the seller is obligated to complete this unfinished work,” the statement said. “As is the case with all escrow agreements, when [the] sellers fulfill their obligations, escrow funds are released.”

LIVWRK, led by Asher Abehsera and Aaron Lemma, and FM Capital teamed up to buy the Gowanus property in 2014 for $20.3 million. They put another $1.1 million into renovating the former warehouse into a modern office, according to filings with the city’s Department of Buildings. The building’s asking rents are $40 per foot.

The 90,000-square-foot building is mostly occupied, with shared-office provider Cowork.rs and mobile marketing company Genius Media are each leasing 43,000 square feet of space. There is another 5,000 square feet of available retail.

At the time of the sale, Lemma reportedly said the developer wasn’t looking to sell, but Samson’s offer was a “prudent exit for us.”

Correction: An earlier version of this story inadvertently misstated the name of plaintiff FM Capital. 

 

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