The Real Deal New York

Bowlmor sues Africa Israel for $32M for allegedly delaying Times Square construction

January 28, 2011 06:05PM
By David Jones

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From left: Lev Leviev, the Bowlmor logo on the old New York Times building and the building at 229 West 43rd Street

Africa Israel, which is converting the former New York Times building into a mega-hotel and entertainment complex, is facing a $32 million lawsuit from Bowlmor, for allegedly dragging its feet on the company’s new 70,000-square-foot bowling alley at the property and trying to dump millions of dollars in construction costs onto the tenant.

Manhattan-based Bowlmor, in a Jan. 13 lawsuit filed in New York State Supreme Court, alleged that the financially troubled company, led by billionaire Lev Leviev, agreed to contribute $6.7 million towards the $23 million cost to build the bowling alley, but continually delayed and disrupted the renovations because it either didn’t have the money or the expertise to get the job done.

“[Africa Israel] has not been able to sign a lease with any other tenant since the lease was executed and is attempting to procure additional economic concessions from plaintiff so it can avoid foreclosure and loss of the building,” wrote Jeff Klarsfeld, Bowlmor’s attorney, in the complaint.

Just last month, discount apparel retailer Daffy’s signed a lease for a 28,000-square-foot space at the building, and it remains unclear whether the lawyer was aware of that signing or what impact that signing would have on the conversion.

Bowlmor signed a lease at the building, at 229 West 43rd Street, in 2009, after more than a year of negotiating with Africa Israel, which originally bought the building for $525 million in 2007 and initially planned to convert the property into a single-tenant headquarters for a publishing firm or another media type company.

Court documents indicate that Bowlmor agreed to commit $23 million to help convert the ground floor, third floor and part of the fourth floor into a bowling alley and entertainment center. Africa Israel agreed to provide $6.7 million towards the renovations, using a letter of credit, according to the complaint, and hoped to restructure its debt, amid concerns about Africa Israel‘s overall financial condition.

The suit alleges that Africa Israel delayed approvals of certain construction changes and financial requests, refused to allow Bowlmor to put Direct TV antennae on the building roof to get sports games at the bar, and incurred 47 building or environmental code violations at the property, which were not corrected.

The suit also names Five Mile Capital, a Stamford, Conn.-based mezzanine lender at the property, as a defendant.

Klarsfeld declined to comment beyond his written statement in the complaint. Officials for Bowlmor, Africa Israel, Five Mile Capital and Robert K. Futterman were not immediately available for comment.

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