Developer Maurice Mann is facing a lawsuit for allegedly failing to pay $400,000 in commissions and fees to Blue Rock Properties, a Manhattan-based brokerage that in 2007, helped arrange financing for the acquisition of the Apthorp on the Upper West Side.
Mann, the general partner of Mann Realty Associates, led the investment group that acquired the landmark rental building, at 390 West End Avenue, for a record $426 million. Mann has since lost the role of managing partner at the Apthorp to Africa Israel, the Israeli real estate and diamond conglomerate led by billionaire Lev Leviev.
Leviev is currently awaiting word from the New York State Attorney General about whether he will declare the condominium plan effective, amid serious concerns about whether the developer was able to find enough buyers to make the building financially viable.
According to the lawsuit, Mann, in February 2007, agreed to pay Blue Rock a fee of $750,000 in return for arranging up to $135 million in mezzanine financing that was provided by Apollo Real Estate Advisors. He agreed to pay 1.5 percent commission on the next $20 million in financing and 2 percent on all funds in excess of $155 million.
The agreement called for Blue Rock, a real estate brokerage led by Arnon Harazi and Steve Novick, to receive 2.5 percent of all equity raised from “Vector and/or any other sources” for the Apthorp project, according to the lawsuit.
The lawsuit does not specify who Vector is; however, Miami-based Vector Group is a tobacco holding company that owns half of the Apthorp’s listing broker Prudential Douglas Elliman. A spokesperson for Vector Group was not immediately able to comment on Vector’s relationship with the Apthorp. Elliman was not immediately available for comment.
According to the lawsuit, Blue Rock received $2.1 million in fees related to the deal by July 3, 2008. The suit alleges, however, that Mann paid the fees based on a $55 million investment by Africa Israel, instead of the $56 million investment, and is therefore entitled to another $25,000, or 2.5 percent of the additional $1 million.
In the complaint, Blue Rock says that at least an additional $15 million in equity financing was arranged, which should result in another $375,000 in commissions and fees, raising the total to $400,000.
“Plaintiff has demanded an accounting as to all the sums received pursuant to the agreement and due and owing to plaintiff,” attorney Lawrence Fabian wrote in the complaint, but defendants [Mann Realty] Associates, Mann and Apthorp have failed and refused to provide such accounting.”
As part of the complaint, Blue Rock is alleging that Mann co-mingled personal and business funds and failed to keep proper records and hold meetings.
Mann was not immediately available for comment and neither was Fabian. Stuart Saft, attorney for the Apthorp sponsor group, which includes Africa Israel Investments, was not immediately available for comment. Blue Rock officials declined to comment.