The Real Deal New York

Winick sues Chelsea Center for commissions

March 09, 2009 05:21PM
By David Jones

Winick Realty has filed suit against the owners of Chelsea Center, a landmark commercial building at 620 Sixth Avenue, alleging the investors, led by the Chetrit Group, failed to pay more than $806,000 in commissions for the retail space.

In 2005, the ownership group, which includes developers Joseph Chetrit, Yair Levy and Charles Dayan, acquired the building from Atlanta-based Jamestown for $287 million.

The suit, filed last month in New York State Supreme Court, names Chetrit’s CF 620 Owner LLC, Levy’s YL 620 Sixth LLC and Dayan’s Bonjour 620 LLC as defendants.

In 2007, the owners hired Winick to be the exclusive leasing agent for the 670,000-square-foot property between 18th and 19th streets, whose retail tenants include Filene’s Basement, TJ Maxx and Bed, Bath and Beyond.

Winick, a Manhattan-based retail broker, alleges that in March 2008, it sent written offers to about 275 prospective tenants and 600 real estate brokers regarding space in the building. By Oct. 1, Winick entered a deal with TJX Cos., the parent company of TJ Maxx, to renew its lease for 15 years.

Winick claims that on Dec. 12, it sent a bill for $802,162 in commissions for the TJ Maxx deal to Bonjour 620. However, the owners failed to pay the commissions. Winick says it sent a written demand for the payment on Jan. 29.

Winick also alleges that it solicited prospective tenants for the space currently held by Filene’s Basement, whose lease is scheduled to expire in March 2010. Winick’s Web site lists the 40,000 square-foot retail site currently held by Filene’s, with the asking price listed as negotiable.

In the suit, Winick alleges that it received multiple letters of interest from Michael’s Stores, an Irving, Texas-based arts and crafts retailer. Ripco Realty, the broker for Michael’s, declined to comment for the story. Winick also alleges that it received offers to rent the space from Kohl’s.

Winick claims that rival broker Robert K. Futterman & Associates approached the investors directly about a deal to lease the space on behalf of its client, Petsmart. Winick says the failure to refer RKF directly to the brokerage is a material breach of its exclusive deal to represent the building. Officials at Futterman were not immediately available for comment.

As The Real Deal previously reported, the mezzanine debt at 620 Sixth Avenue was put up for sale in late 2008. When the owners acquired the building, the deal included 200,000 square feet in air rights to expand the size of the building, but the owners declined to exercise that option and were unable to raise rents sufficiently in the building.

A 2006 Wachovia Bank pre-sale report obtained by The Real Deal shows that 620 Sixth Avenue had a first mortgage of $235 million and $30 million in mezzanine debt. Filene’s paid $19.97 per square foot, according to the report, and the retailer had a March 2010 renewal option that would nearly double the rent.

The owners had been seeking to boost office rents to $65 a square foot.

Officials at Chetrit and Winick were not immediately available for comment.

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