Eastern sues Extell for $370K in commissions

TRD New York /
Apr.April 27, 2010 06:07 PM
alternate textFrom top: Gary Barnett, president of Extell, and Peter Takiff, CFO of Eastern Consolidated; buildings, from left: 120-126 West 25th Street and 112-118 West 25th Street (building photo source: PropertyShark)

Investment sales firm Eastern Consolidated filed suit against residential and commercial builder Extell Development, demanding payment of more than $370,000 in commissions that has so far been refused, for the sale of air rights in Chelsea.

Eastern claims it was the broker on a closed sale of development rights in January to a company controlled by Extell, and is owed $371,800, according to the suit filed in New York State Supreme Court Friday. There is a dispute on whether the deal has actually closed.

But Extell, according to Gary Barnett, the company president, owes nothing to Eastern because no transaction has been finalized.

“They are entitled to nothing,” Barnett told The Real Deal. “No transaction has taken place.”

The development rights are being transferred from a four-building parcel at 120-126 West 25th Street to Extell’s 29-story hotel project at 112-118 West 25th Street, according to a memorandum of an agreement for the sale of the air rights signed in December, city property records filed in January show. The plans are still under review by the city’s Department of Buildings.

Eastern, headed by Chairman and CEO Peter Hauspurg, says in the lawsuit the sale occurred Jan. 5, and that Extell has breached a commission agreement by not paying.

Eastern CFO Peter Takiff told The Real Deal the company was due its commission. He would not disclose the amount of the air rights deal.

“The documentary evidence will establish that the transaction took place and that Eastern Consolidated earned its commission,” he said.

Extell filed plans last year to build a 29-story hotel with 100 units at the site, DOB Building records show.

The hotel site is currently a garage, which has been the location of the Chelsea Antiques Garage, a popular flea market.

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