Rushmore buyers offered deals to stem mass defections, sources say

TRD New York /
Oct.October 23, 2009 06:26 PM

The sponsors of Extell Development’s Rushmore condominium have quietly begun offering sales discounts of up to 25 percent in a campaign to retain at least some of the 30-plus buyers looking to back out of their contracts, according to multiple sources.

A group of at least 34 buyers filed complaints with Attorney General Andrew Cuomo’s office, looking to get out of their contracts. And sources said that representatives of the Carlyle Group, which is Extell’s partner in the Rushmore, at 80 Riverside Boulevard, have contacted individual members of the group regarding discounts. Carlyle officials were not immediately available for comment, but Gary Barnett, Extell’s president, denied that any discounts were being offered.

“It’s not true,” said Barnett, in an e-mailed statement to The Real Deal. “These rumors are being spread by an attorney with an axe to grind.”

Barnett did not elaborate on which attorney he was referring to, or how he knew about any specific claims.

Attorney Richard Cohen, who represents the group of 34 Rushmore buyers, confirmed that one buyer dropped out of the group in recent days and one other buyer previously left the group.

“Our assumption is they were offered a discount,” said  Cohen. “We don’t think they would otherwise leave the group.”

As The Real Deal reported earlier this month, a JPMorgan Chase executive filed suit against the sponsors, looking to back out of a $6.9 million contract for two apartments.

Prices in the building range from $925,000 for a 775-square-foot one-bedroom to $13.25 million for a 7,200-square-foot, eight-bedroom penthouse. The penthouse price includes a $1 million discount from the original asking price, according to Streeteasy.com.

Extell has been scrambling to close sales at the 289-unit building. The company, which developed the Rushmore with financial backing from the Carlyle Group, began signing contacts in 2007 and was originally scheduled to begin closings by September 2008.

According to published reports, the September 2008 date was an error made by attorneys for the sponsor, and the actual closing date was not supposed to be until September 2009.

Real estate attorney Lisa Urban said a couple she originally represented in its Rushmore deals, is part of the group of buyers trying to get out of their contracts. She cited construction delays and the collapse in the real estate market as the main reasons for her clients wanting to get out of their deals.

“For my particular clients it was market issues more than anything else,” Urban recalled. “It took so long to complete the project at that point.”


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