22 Renwick developer refutes buyers’ claims about sham closing

TRD New York /
Jul.July 24, 2009 09:21 AM

The developer of 22 Renwick is refuting buyers’ claims that the first closing in the building was a sham.

“We’re not doing anything tricky here,” said Andrew Bradfield, a principal at Orange Management and the developer of Renwick along with Helix Partners.

Buyers in the building have filed applications with the attorney general to get their money back, saying they’re entitled to a right of rescission because of delays at the site.

Bradfield says their applications have no legal merit and some buyers are merely looking for steep discounts from the originally agreed-upon sales prices.

“They’re treating it like they can close at that price [only] if they feel like it,” he said. “That is not the idea of a contract.”

Buyers at 22 Renwick have said that the first closing at the building doesn’t count because it was a commercial unit rather than a residential apartment.

But Bradfield dismissed those claims.

“The law is very clear,” he said. “It doesn’t specify residential or commercial.”

Buyers also said the sale of the commercial unit violates a law requiring the first closing in a new condo to be an “arm’s length” sale, meaning that the buyer is not related to the sponsor by a family or business relationship.

Bradfield said the transaction is a bona fide sale.

“We don’t have any interest in the purchaser,” he said. “Yes, we knew them, but we know lots of investors. It’s not even going to come up as a question.”

The buyer of the commercial storefront, Damon Craig, is an employee of Blue Zees, a company that claims on its Web Site to be the “development consultant and owner’s representative” at 22 Renwick Street.

To buy the property, Craig formed an entity known as Next Block Over May 28, 2009, according to documents from the New York Department of state, and received a $300,000 discount on the purchase of the storefront space.

It now falls in the hands of the attorney general to determine the validity of the sale.

In the meantime, Bradfield said, buyers are simply trying to draw attention to the building in a “desperate move” to get their money back. “They’re fomenting as much noise as possible,” he said.
 
The principals of Helix Partners — Matthew Brown, William Lozito and Joseph Lozito — declined to comment.

Closings of residential units are expected to begin in August or September, Bradfield said. Sales began in October of 2007, and according to the offering plan, the condominium was slated for completion in June 2008. Bradfield said residential closings are taking place later than expected because of his decision to take on a partner, Helix Partners, which in turn led to construction commencing eight months later than planned.

“The plan was written for a construction date that was eight months ahead of when we started construction,” he said. “We didn’t update the plan at the time we started selling to reflect that timing.”

The building, designed by Philip Johnson/Alan Ritchie Architects, is located on Renwick Street between Spring and Canal streets.

According to several of the buyers, who spoke to The Real Deal but requested anonymity, at least six of the 14 purchasers of apartments in the building have filed requests with the attorney general’s office to get their deposits back. There are 19 residential units in the building in addition to the commercial unit.

By law, if a sponsor does not close on at least one unit in a new condo within a year of its original projected date of completion — known as the “outside date” — all of the buyers must be offered the right of rescission, meaning that they may opt to be released from their contract and get their deposits back.

The outside date at 22 Renwick was June 1, 2009, and the first closing in the building, the commercial unit, took place May 29, according to city documents.

While construction delays often went unnoticed in the past, there’s much more at stake in an environment where construction lending is tight and property values are declining. Recently, buyers were given rescission rights at the Setai on Broad Street, Upper West Side condo Linden 78 and Financial District condo conversion project 45 John Street.


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