$12M Brooklyn Law residence sale challenged

New York /
Jan.January 07, 2011 03:55 PM

The developer of the condominium Soho Mews is suing the Brooklyn Law School for violating an agreement to sell to it the residence hall at 184 Joralemon Street, which today was reported to be in contract for $12 million to Craig Nassi’s BCN Development.

Manhattan-based developer United American Land, owned by brothers Albert, Jason and Jody Laboz, filed a lawsuit in Brooklyn Supreme Court Dec. 30 claiming the law school breached its contract to sell it the 12-story Beaux-Arts building for $9.2 million, court documents show. 

The suit could block or delay the sale to BCN Development, which plans to convert the 30,000-square-foot property in Brooklyn Heights into 24 two-bedroom apartments.

The court papers say that lawyers for United American Land sent a $2 million down payment and signed copies of a sales agreement on Dec. 16 to the Brooklyn Law School attorney. At that point the deal appeared to be solid, the lawsuit says, citing emails by school president Joan Wexler.

Then on Dec. 20, Albert Laboz met with Wexler, who informed him that the school would not go through with the sale, because it was bound by a fiduciary duty to accept another — higher — offer.  

The lawsuit does not claim the law school signed the agreement, but it says the school was bound by good faith and fair dealings to go forward with the sale. In addition, the papers claim as of the filing date the school had not returned $1.84 million of the deposit. 

Albert Laboz, who is also chairman of the Fulton Mall Improvement Association in Brooklyn, said Brooklyn Law School came to him, when they were trying to sell it, and he put in an offer above the asking price. 

Laboz, through an outside spokesperson, said in a statement to The Real Deal: “To say the least, it is unfortunate that an institution like Brooklyn Law School would behave in this way.  It sends a terrible message to its students and violates, I believe, a sense of ethics and friendship that you would expect from an institution like this one.”

Nassi and BCN Development were not named in the lawsuit. And Nassi said he was not worried about the court filing.

“They are ethical, savvy, experienced sellers. They do everything by the book,” Nassi said. “They are a law school for god’s sake.”

In November, BCN Development sold the Jewish Daily Forward building for $20 million after considering developing it into condominiums.

Wexler said in a statement that Laboz should understand that the contract has to be signed by both parties to be effective.
“He knows very well that I did not execute, or even read, the purported contract,” she said.
“United American Land is nothing more than a disappointed bidder.
We are confident that we will prevail in any court proceeding.”

The lis pendens, which is a public notice that there is a lawsuit pending on the property, could impact the sale by making either the buyer or lender anxious about the outcome of the case, real estate attorney Ronald Steinvurzel, said. But a lis pendens or ongoing litigation in itself does not halt a sale, he said. He is not involved in this case. 

United American Land in October acquired 449 Broadway for $15 million.


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