The Real Deal New York

Extell, Carlyle blocked from selling out Rushmore condos

In longstanding typo case, judge rules that developers must pay $5 million in interest first

August 08, 2013 04:30PM
By David Jones

From left: Extell's Gary Barnett, 80 Riverside Drive and Carlyle's Will Conway Jr.

From left: Extell’s Gary Barnett, 80 Riverside Drive and Carlyle’s Will Conway Jr.

Extell Development and Carlyle Realty Partners have been blocked from unloading the last remaining condominium at the Rushmore on the Upper West Side until they cough up $5 million in interest payments to a group of would-be buyers.

New York State Supreme Court Justice Milton Tingling issued a temporary restraining order on Wednesday after lawyers for 33 former condo buyers said the developers had failed to make the interest payments granted after more than four years of litigation over an alleged “scrivenor’s error” in the Rushmore offering plan.

“We are pleased that Justice Tingling has restrained the sale of the last remaining condominium unit at the Rushmore so that our clients have some security to be able to collect the interest that Justice [Anil] Singh has awarded them,” said attorney John Coleman, whose firm represents the 33 buyers.

Extell declined to comment. Lawyers for the condo did not return calls.

In December, Extell and Carlyle were forced to refund nearly $16 million in escrow deposits to more than 40 buyers at the Rushmore, who previously claimed that the developers missed a September 2008 deadline to close their first apartment sale at the luxury high-rise at 80 Riverside Drive.

Former New York Attorney General Andrew Cuomo ordered the money refunded in April 2010, and the developers, operating under the name CRP/Extell, went on to lose multiple appeals in federal and state court. They had argued that they meant to set the closing deadline for September 2009 and the buyers misinterpreted a typographical error.

The developers finally handed back the deposits in December 2012, but a group of 33 buyers won a ruling requiring Extell and Carlyle to pay 9 percent interest on the refunds, since they had refused to refund the money during the appeal process, despite several state and federal court orders.

By restraining the sale of the final Rushmore unit, the buyers contend they will be protected from claims that the developers have run out of money from selling the apartments. The final unit is listed for about $4.7 million, according to court documents.

In May, the buyers filed a motion to hold the developers in contempt for ignoring Justice Singh’s September 2012 order to pay the $5 million in interest. The developers argued repeatedly that they were allowed to hold onto the deposits, and later the interest payments, until their appeals were exhausted.

The ruling follows another defeat for the Rushmore developers: JPMorgan Chase executive Kelly Coffey won a $427,000 judgment against them in April, and in June a court forced the developers to post a bond covering that amount. Last month, a state judge ruled that Extell and Carlyle must post an additional bond to cover interest until Coffey is paid.

A court hearing is scheduled for Aug. 27 before Judge Singh.

  • consumer

    “TYPO” my ass

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