Community Preservation Corporation, developer of the massive apartment complex planned at the former Domino Sugar refinery on the Williamsburg waterfront, has an urgent need for a development partner and injection of $50 million in capital, the Wall Street Journal reported.
The CPC began exploring a sale of its Domino Sugar Factor project last month, as it is struggling financially because it got swept up in speculative lending for large-scale condominium projects during the boom. Just last week, the Katan Group, CPC’s partner in the project, filed suit against CPC alleging breach of fiduciary duty and negligent performance, among other charges.
“We are seeking a development partner whose expertise can help us carry out this development in a way that is consistent with how the community and city would expect,” said Rafael Cestero, CPC’s CEO.
A deal is rumored to be be in the works between Pacific Coast Capital and CPC, wherein “CPC would have day-to-day control over the project… but Pacific Coast Capital would have final say over major decisions such as sales and new partnerships,” according to the Journal.
The Katan Group is not supportive of that proposition. The suit calls the agreement “clearly against the economic interests of both the entity that is management and its component members.”
It is also unclear what will happen with regard to CPC’s promise that 30 percent of the apartments built at the Domino Sugar site will be affordable, when and if some or all of the project is sold, the Journal said. [WSJ]