Levy hit with $700K suit at Park Columbus

TRD New York /
Mar.March 04, 2009 06:27 PM

Developer Yair Levy is being sued for more than $700,000 by a subcontractor at troubled condo conversion Park Columbus, in a suit that alleges he misappropriated the funds.

Demar Plumbing Corporation, one of 20 subcontractors and suppliers that have placed liens against the partially completed Park Columbus, has filed a lawsuit claiming Levy and his company committed breach of trust obligations by “taking monies from the trust for themselves and making and consenting to diversions of trust funds to persons, firms or corporations not authorized to receive the trust funds.”

“Our belief is that the guy
has taken the funds for himself inappropriately,” said Gregory Tembeck, Demar’s attorney. “The bank funds are
gone, and we know we weren’t paid.”

Some $3.15 million in mechanic’s liens have been filed at Park Columbus, formerly a rental building known as Columbus Green at 101 West 87th Street at Columbus Avenue, in the past three months. In late February, Halstead Property Development Marketing, the exclusive sales agent at the building, filed suit against Levy’s 101 West 87th Street LLC, asking for $75,000 in outstanding expenses and fees connected with sales at the building. Several weeks ago, The Real Deal reported that construction on the building was halted and the on-site sales office closed.

“It looks as though this guy has gone bankrupt and can’t pay his bills,” Tembeck said.

Between May of 2008 and December of 2008, Demar provided $936,950.51 worth of labor and materials at Park Columbus, according to the suit, of which only $223,700.44 has been paid.

The company hasn’t received a payment from Levy since this fall, Tembeck said.

Demar seeks the remaining $713,250.07 in damages plus interest, and wants Levy to be compelled to disclose all financial transactions related to the project, the suit says, “including a statement of all monies held or paid on account thereof, and to whom paid and the time or times of such payments.” The suit also calls for Levy to be required to “account for the disposition of any such sums of money disposed of … And Also The Place or places, property and assets of every kind and nature into which the sums or any part thereof are traceable.”

Levy, who did not respond to requests for comment, is also facing legal challenges at Rector Square, a Battery Park condo conversion he purchased from Related Companies at the same time as then Columbus Green. In February, Anglo Irish Bank filed suit to foreclose on Rector Square after Levy defaulted on a $165 million loan to the lender and payments to the Battery Park City Authority in addition to failing to meet construction deadlines.

Even after Halstead’s lawsuit was filed, Halstead representatives said the real estate firm was still scheduling appointments with interested buyers at the site and that construction was scheduled to start up again.

Park Columbus’ lender, Arbor Realty Trust, did not respond to requests for comment.

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