The Real Deal New York

Atlantic Development, Winick spar with Yonkers firm over Duane Reade commission

Friedland Realty wants compensation for allegedly bringing drugstore to Bronx retail space

March 15, 2012 08:30AM
By Leigh Kamping-Carder

From top: Winick CEO Jeff Winick, Atlantic COO Michael Stolper and Friedland Realty's Robert Friedland; 3229 Third Avenue (right)

Atlantic Development Group and Winick Realty Group will soon face off in court against a Yonkers, N.Y.-based commercial brokerage that claims they failed to pay half a $250,000 commission for helping lease a Bronx retail space to drugstore chain Duane Reade.

Friedland Realty, which is part of the NAI Global Network and also has a Manhattan office, was allegedly hired by Atlantic to secure a retail tenant for the ground-floor of 3229 Third Avenue, a condominium building that is part of Boricua Village, a 452-unit affordable housing project in Melrose.

Friedland claimed that it secured Duane Reade as a tenant, only to have Atlantic negotiate a lease directly with the drugstore chain’s broker, Winick. Both Atlantic and Winick have denied the claims in court papers. Duane Reade is not involved in the litigation.

Friedland filed the suit in New York Supreme Court this past October, seeking about $124,500 in commissions from Atlantic and Winick. A hearing is scheduled for April 3, when the parties will argue before New York State Judge Debra James over which documents each side must hand over.

The dispute dates back to July 2007, when Atlantic hired Friedland as its exclusive broker at the space.

Friedland claimed that it introduced Duane Reade to Atlantic and that in November 2007 all three companies agreed that Friedland and Winick would split the commission down the middle. But six months later, in May 2008, Atlantic allegedly booted Friedland from the negotiations and decided to continue talks directly with Winick.

A source close to Atlantic said that Friedland was terminated for cause in early 2008 and, shortly after, the Duane Reade deal fell apart.

Atlantic and Duane Reade tried unsuccessfully to reach a deal in 2009, and when they finally signed an agreement, it was materially different than the deal on the table when Friedland was still involved, this source said.

Atlantic ultimately signed a lease with Duane Reade much later – in December 2010, according to CoStar.

Friedland did not immediately return a call seeking comment. An attorney for the company largely declined to discuss the case.

“We have a great relationship with our brokers,” Michael Stolper, Atlantic’s COO and general counsel, said in a statement to The Real Deal. “However, we will not pay for work that wasn’t done. It is unfortunate that this step was taken, but we will vigorously defend our position in court.”

A spokesperson for Winick declined to comment.

The drugstore still occupies the space, which is 9,870 square feet, according to CoStar. A spokesperson for Duane Reade did not return a call seeking comment.

Atlantic, which was co-founded by Peter Fine, first took over the property in September 2007, when New York City sold the developer four vacant residential lots there for $1 each, property records say. The same day, Atlantic transferred the land to Boricua Village Housing Development Fund, an entity that shares the same address as the developer, for $4, records show.

Duane Reade has long been a client of Winick, and this is not the first time the brokerage’s representation of the drugstore has sparked controversy.

Jeff Winick, CEO of the firm, and its former president, Cory Zelnik, were involved in deals with two Duane Reade executives who were convicted of securities fraud in 2010 for allegedly inflating company earnings using sham real estate transactions. Neither real estate broker was charged. Zelnik testified in the case under a grant of immunity.

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