The Real Deal New York

Catsimatidis accuses senator of trashing Bronx building

April 09, 2009 04:09PM
By Adam Pincus

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When a non-profit led by an influential state senator vacated a Bronx commercial space owned by billionaire real estate developer John Catsimatidis earlier this year, it not only owed back rent, but it severely damaged the space, the property’s owner alleges in court filings.

Catsimatidis, the CEO of the Gristedes supermarket chain who is exploring the idea of running for mayor, accused the Soundview HealthCare Network and its president, State Senator Pedro Espada Jr., of removing fixtures and cutting wires at the Jessica Guzman Medical Center at 616 Castle Hill Avenue, which the nonprofit abandoned February 27, a lawsuit filed in Manhattan State Supreme Court April 6 said.

Fixtures such as doors, ceiling lights, “sinks, [a] hot water heater, [a] toilet flushing mechanism and cabinets were all removed in violation of the lease,” the complaint said. The nonprofit also owes $155,574 in back rent to Catsimatidis, president and CEO of Red Apple Group, the suit charges.

Tenant Soundview, a Bronx health care provider founded by Espada in 1978, was in a simmering dispute with the landlord, arguing that a proposed rent increase was too high. The medical facility had been paying $7,817 per month for the 3,500-square-foot space, or $28.60 per square foot, Catsimatidis Red Apple Group spokeman Rob Ryan said.

However it signed a renewal lease in January 2007 for $11,375 per month — or $39 per foot — the complaint said. The rent proved too high, and in September 2008 Soundview notified Catsimatidis that it would vacate in one year. But late last year it stopped paying rent and in February 2009, it turned over the keys, the court papers said.

When Red Apple officials reentered the space, they were surprised to find it had suffered tens of thousands of dollars worth of damage, Ryan said.

“Red Apple was shocked by the condition the space was left in, as well as the amount of back rent that was owed, and we plan to take legal action necessary to recover it,” he said.

Neither Espada nor Soundview immediately responded to requests for comment.

Espada has been controversial as senator, joining a renegade group of Democrats who shortly after being elected last fall put Democratic control of the state senate in question for a brief period.

Soundview workers have also been investigated for wrongdoing. In 2005, three employees of the company pleaded guilty to diverting $30,000 to one of Espada’s earlier election campaigns, but Espada was never charged.

And Espada was well paid for his leadership of the nonprofit. According to a November 2007 federal filing, Espada earned $338,151 in annual salary as president of the nonprofit. However, in the most recent filing dated November 2008, his 40-hour-per-week salary was zero.

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