Subcontractor sues Swig FiDi project
October 16, 2008 02:55PM By Adam Pincus
25 Broad Street
Lehman Brothers' bankruptcy has caused another headache for Swig Equities' stalled condominium conversion project in the Financial District -- a dearth of funds to pay contractors.
Nova Development Group, of New Brunswick, NJ, which provided asbestos abatement at 25 Broad Street and Exchange Place, filed a lawsuit in Manhattan State Supreme Court October 10, seeking $764,100 for work done between February and July this year, according to the complaint.
Earlier this month, Swig Equities said it had suspended sales at the project, citing Lehman Brothers' bankruptcy. Lehman Brothers Holdings, which filed for bankruptcy protection September 15, was a major funder of the planned conversion of the office building to a 346-unit condo.
Nova Development Group filed the lawsuit seeking payment from Swig Equities' 25 Broad LLC and the contractor who hired Nova for the project.
Swig Equities said in a statement that it expected more subcontractors and contractors to file mechanic's liens against the building because Swig's funding from Lehman Brothers has been halted, rendering the developer unable to pay the contractors.
"Due to the effect of the Lehman bankruptcy, the construction loan funds for 25 Broad are frozen and it is anticipated that liens may be filed while the Lehman bankruptcy is pending," the company said through a spokesman. "As soon as 25 Broad's operating accounts are unfrozen, the project expects that all outstanding invoices will be paid in the normal course of business."
Ronald Steinvurzel, the attorney representing Nova, recognized that Lehman Brothers had suspended funding for 25 Broad Street, but said Nova wanted to file its legal action to make certain it would be paid down the line.
"The financing fell through, which is par for the course in today's economy," Steinvurzel said, adding, "We had given as much time as possible to the owners. But you have to file your lien to preserve your rights."
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Comments
Anonymous
Ouch!!
Comment #1 Posted By: Anonymous 10/16/08
Anonymous
I lived at The Exchange for 6 years, moved in during it's converstion to a rental building. The area was and is extremely quiet. After 9/11 the new barriers the surround the NYSE make getting to the building difficult, taxies or Fresh Direct have to stop several blocks away. The original lobby is breathtaking, but the apartments, even with 10'-14' ceiling are dark and the neighborhood weirdly somber and quiet. It was like living in the Epcot version of New York City, beautiful buildings, but dealy quiet. Given the darkness and isolation of the building the condo prices were clearly inflated...$1.5 million for a 2 bedroom facing a partiwall and pitch dark airshaft? No thank you, my brownstone in Brooklyn is better.
Comment #2 Posted By: Anonymous 10/17/08
Mike
The biggest problem these new developments have is they price them 20-30% above current market price pushing the risk to the buyer. The buyer takes a roll of the dice with not knowing what interest rates will be like 1-2 years from the downpayment and also risk in not knowing what the market will be like. Developers should be giving the buyers a discount not a premium price since they are supporting the project and helping it get through to completion. I am happy to hear potential buyers in this building were savvy enough to understand how off priced these units were. Its time developers make the buyer feel they are invested in the project as well and give them a fair price with potential upside for them as well.
Comment #3 Posted By: Mike 10/17/08
Anonymous
Sheffield 57 is next, almost 3 million dollars in mechanics liens...mostly unpaid ASBESTOS abatements.. with tenants still living inside...what a PIG
Comment #4 Posted By: Anonymous 10/29/08
Anonymous
Pay!!!!!!!!!!! Swig is constantly 3 to 4 months behind paying sub contractors. Contractors at 25 Broad have not been paid since june and that was pay due in march. He has no intention of paying. He wants to be a Trump but, he is peaunut in Trump World. At least Trumop would sit with Contractors and tell them your not getting paid. Swig just keeps telling people its coming.
Comment #5 Posted By: Anonymous 11/01/08
Anonymous
Unfortunetly these sub contractors will never get there monety and some will probably lose the bussiness. But Swig will not lose a dime. How do you sleep at night Swig? do you have a heart? Some dy you will lose it all and not even dady in law wil be able to help. Why not pay these subs out of your personal money like these subs paid for the material and labor for your buildings. Some even probably refinanced houses to sub sibsidize a self proclaimed billionair developer. More like a High Level thief you should goto jail for what you are putting people thru.
Comment #6 Posted By: Anonymous 11/01/08