Citibank files to block Toy Building eviction
July 28, 2010 03:00PM By David Jones
Yitzchak Tessler and 1107 Broadway
Citibank says it stopped paying the monthly rent in March and has since placed more than $296,300 in escrow amid claims that the landlord failed to pay for utilities and keep the building, at 1107 Broadway between 24th and 25th streets, in safe condition. The building, a stalled condominium conversion, is currently being foreclosed on by Lehman Brothers.
"In violation of the lease, 1107 Broadway has failed to make all necessary repairs (including structural repairs) to keep the premises in good working order and condition," attorney Cari Lewis, representing the plaintiff, alleged in the injunction request filed July 20.
The lawyers for Tessler counter that Citibank withheld rent in violation of its lease, which it signed in 2004. They also claim that Citbank continues to operate a branch at the location despite filing complaints with city officials about alleged safety issues.
"There were some violations that were issued as a result of Citibank calling various agencies to complain," Mitchell Kosoff, attorney for Tessler, told The Real Deal. "The owner of the building is making arrangements with the Department of Buildings to ensure that the building continues to be in compliance with all applicable rules and regulation. None of these violations, however, is a basis for Citibank to withhold its rent pursuant to its lease."
The dispute comes at a time when bankrupt Lehman is trying to foreclose on the 16-story building, which Tessler wanted to convert into a 165-unit condo. The investment firm filed suit in May seeking $136.8 million from Tessler, after he allegedly defaulted by not making payments when the loan came due in 2008. Tessler, president and chief executive of Tessler Development, is being held personally accountable for the default, as he signed guarantees linked to the mechanic's liens and other default items, according to Lehman's suit.
Citibank initially filed suit in June, seeking to block the eviction, alleging not only was the building unsafe, but that the building failed to maintain working sprinkler systems and then that the bank was forced to pay all of the building's Consolidated Edison payments since March, totaling tens of thousands of dollars.
According to the DOB website, there are 49 open violations at 1107 Broadway. A stop-work order was issued against the building in October 2008 for failure to maintain a site safety officer at the site. A second stop-work order was issued in May 2010 after the construction permits were revoked.
In addition to the restraining order, the Citibank suit demands that DOB issue an immediate vacate order and that the landlord pay damages of more than $1 million.
Tessler was not immediately available for comment. Beth Huffman, a spokesperson for Dechert, which represents Lehman, declined to comment, and DOB officials were not immediately available for comment.
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Comments
Anonymous 1
Citibank is trying to muscle their way around and I sure hope NYC Courts wont let citibank have their way. They should penilize citibank for witholding rents and compromising the developers situation instead of letting the development continue and get the city back on its feet with more work and jobs for the people.
Comment #1 Posted By: Anonymous 1 07/28/10
Anonymous
The whole climate in the city is ugly. People are showing their worst side in terms of greed and mean spiritedness!
Comment #2 Posted By: Anonymous 07/28/10
Anonymous
To # 1. Are you kidding me? Citibank doesn't care if Tessler is out of money. Most Developers like banks as tenants because they give steady revenue but banks don't take BS from anyone. Tessler must have failed to meet his obligations (he is cheap as hell).
Comment #3 Posted By: Anonymous 07/28/10
Anonymous
Tenants run the buildings, unions run the businesses, children run the household, litigants run the courtrooms, everything is upside down! If a tenant doesn't like the building,LEAVE! Unions create your own business and you give your employees anything you want! The parents are the head of household, not the children! Is this dooms day approaching?
Comment #4 Posted By: Anonymous 07/29/10
Anonymous
When this upside down mentality takes over, who will create tomorrow? Tenants can't run the building, unions don't create businesses, children can't run a household, litigants can't rule, sinners can't be Godly, they are just hijackers of someone else's efforts, initiative, and creativity! If all of the just mentioned quality people left the country, guess what will be left behind? NOTHING!
Comment #5 Posted By: Anonymous 07/29/10
Anonymous
No. 5 & 6, I know a good therapist.
Comment #6 Posted By: Anonymous 07/29/10
Anonymous
The Citi never sleeps except with the politicians lol
Comment #7 Posted By: Anonymous 07/29/10
Anonymous
Citibank will wind up coughing up the money plus both sides' lawyers fees and damages incurred, ive seen this movie a hundred times. Wake me when they're done.
Comment #8 Posted By: Anonymous 07/29/10
Anonymous
love you YT! stay strong!
Comment #9 Posted By: Anonymous 07/30/10
Anonymous
YT will prevail
Comment #10 Posted By: Anonymous 08/03/10