The Real Deal New York

Tempo developer fired, Hauspurg sued, more complaints at Downtown Properties


August 03, 2009 03:54PM
By Adam Pincus

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A Manhattan developer that was removed last month from managing the construction of the luxury condominium project Tempo in Kips Bay is suing to block the move in order to shift the dispute to arbitration.

Quantum Partners was fired by its partner, Irish home builder Menolly Group, at the project at 300 East 23rd Street on July 15, court papers filed in New York State Supreme Court July 24 said.

Quantum Partners, led by developer Michael Kornblum, partnered in 2007 with the Menolly Group to build the 103-unit condo at the corner of 23rd Street and Second Avenue.

The developer was fired because it made false statements to Menolly, including those about work done by Tempo contractors on Kornblum’s personal residence, said Jacob Pultman, attorney for Menolly and a partner at law firm Allen & Overy. Menolly has taken over oversight of the construction, Pultman said.

Larry Hutcher, an attorney for Quantum Partners and partner at law firm Davidoff Malito & Hutcher, said any work performed at the home was paid for separately.

“We feel there was nothing wrong. This is nothing other than a power play to seize control of the project,” he said.

On July 29, State Supreme Court Justice Bernard Fried heard Quantum Partners’ request for a preliminary injunction. A ruling on the motion was expected shortly, Hutcher said.

Despite the rancor, both sides say the project remains on time and on budget.

Quantum Partner’s Kornblum has been involved in the a number of high-profile development projects, including the rehabilitation of 1412 Broadway in 1989.

Peter Hauspurg and investment partner file dueling lawsuits

The president of a residential management company is battling Peter Hauspurg, chairman and CEO of Eastern Consolidated, over eight investment properties the two own together, recent court filings show.

Hauspurg and the partner, Jerry Edelman, president of J&M Realty Services, have varying ownership interests in the buildings, all of which Edelman’s firm managed at one time.

The lawsuits, all filed in New York State Supreme Court, began after Hauspurg fired Edelman’s firm from six of the properties in September 2008 and two more in July 2009.

“Edelman and Peter Hauspurg are adversaries in a wide array of disputes concerning the operation and management of eight buildings,” one of Edelman’s lawsuits says.

Peter Takiff, chief financial officer for Eastern Consolidated, speaking on behalf of Hauspurg, said the litigation arose after J&M Realty Services was removed as manager of the properties.

“We are confident that Peter Hauspurg has, in all respects, acted appropriately within his authority as managing member” of the entities that own the properties, he said.

After being fired from the last two locations, 4 and 8 Manhattan Avenue on the Upper West Side at 100th Street, in July 2009, Edelman brought two suits seeking to block his removal and disputing a $1.9 million refinancing of a loan at the site, court papers show.

Edelman won a preliminary injunction in New York State Supreme Court today from Justice Richard Lowe blocking the removal of J&M Realty Services at 4 and 8 Manhattan Avenue, pending further review of the case by a referee, court records showed.

Owner sues management firm Downtown Properties for $10M

Soho-based property management firm Downtown Properties was hit with its third lawsuit in four months, this time by an outraged client who is seeking $10 million in damages.

Downtown Properties and its president Richard Bassik are accused in the lawsuit filed July 24 of siphoning $212,000 for his own personal use, after being hired in May 2008 to manage a commercial condo and residential penthouse cooperative, the suit filed in New York State Supreme Court says.

Eastlite Corporation, which owns the commercial condominium at 153 Chambers Street in Tribeca, and Michael Berg, principal of Eastlite, who owns the penthouse co-op at 652 Hudson Street in the Meatpacking District, hired Downtown Properties to manage the two units.

“Downtown and Bassik have fraudulently converted at least $212,000 of plaintiff’s money for his personal benefit and use,” the suit alleges.

The suit also accuses Downtown Properties’ accountant and two banks of negligence, and is seeking $10 million in punitive damages.

The suit further alleges that a criminal investigation by the fraud unit of the Manhattan district attorney’s office had been opened naming Downtown Properties and Richard Bassik.

A spokeswoman for the Manhattan district attorney’s office declined to comment. Bassik did not respond to requests for comment, and his attorney Macia Fokas did not respond to the charges.

Downtown Properties was sued in April and June by two Manhattan cooperatives alleging misappropriation of funds, The Real Deal reported last week.

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