Extell, Carlyle blocked from selling out Rushmore condos

In longstanding typo case, judge rules that developers must pay $5 million in interest first

TRD New York /
Aug.August 08, 2013 04:30 PM

Extell Development and Carlyle Realty Partners have been blocked from unloading the last remaining condominium at the Rushmore on the Upper West Side until they cough up $5 million in interest payments to a group of would-be buyers.

New York State Supreme Court Justice Milton Tingling issued a temporary restraining order on Wednesday after lawyers for 33 former condo buyers said the developers had failed to make the interest payments granted after more than four years of litigation over an alleged “scrivenor’s error” in the Rushmore offering plan.

“We are pleased that Justice Tingling has restrained the sale of the last remaining condominium unit at the Rushmore so that our clients have some security to be able to collect the interest that Justice [Anil] Singh has awarded them,” said attorney John Coleman, whose firm represents the 33 buyers.

Extell declined to comment. Lawyers for the condo did not return calls.

In December, Extell and Carlyle were forced to refund nearly $16 million in escrow deposits to more than 40 buyers at the Rushmore, who previously claimed that the developers missed a September 2008 deadline to close their first apartment sale at the luxury high-rise at 80 Riverside Drive.

Former New York Attorney General Andrew Cuomo ordered the money refunded in April 2010, and the developers, operating under the name CRP/Extell, went on to lose multiple appeals in federal and state court. They had argued that they meant to set the closing deadline for September 2009 and the buyers misinterpreted a typographical error.

The developers finally handed back the deposits in December 2012, but a group of 33 buyers won a ruling requiring Extell and Carlyle to pay 9 percent interest on the refunds, since they had refused to refund the money during the appeal process, despite several state and federal court orders.

By restraining the sale of the final Rushmore unit, the buyers contend they will be protected from claims that the developers have run out of money from selling the apartments. The final unit is listed for about $4.7 million, according to court documents.

In May, the buyers filed a motion to hold the developers in contempt for ignoring Justice Singh’s September 2012 order to pay the $5 million in interest. The developers argued repeatedly that they were allowed to hold onto the deposits, and later the interest payments, until their appeals were exhausted.

The ruling follows another defeat for the Rushmore developers: JPMorgan Chase executive Kelly Coffey won a $427,000 judgment against them in April, and in June A Court forced the developers to post a bond covering that amount. Last month, a state judge ruled that Extell and Carlyle must post an additional bond to cover interest until Coffey is paid.

A court hearing is scheduled for Aug. 27 before Judge Singh.

Related Articles

One Manhattan Square Extell Development CEO Gary Barnett (Credit: Curbed NY)

Extell lands $690M refinancing package for One Manhattan Square

Brooklyn Point at 138 Willoughby Street and Extell Development’s Gary Barnett (Credit: Alistair Gardiner for The Real Deal)

And you get an incentive! Extell offers to pay carrying costs at Brooklyn’s tallest tower

Raizy Haas and Gary Barnett (Credit: Getty Images, iStock)

One of Gary Barnett’s longtime deputies is leaving Extell

Gary Barnett and 1855 Broadway (Credit: Google Maps)

Gary Barnett assembling Columbus Circle development site

Extell Development chairman Gary Barnett and One Manhattan Square (Credit: Anuja Shakya, StreetEasy)

Rent now, buy later at Extell’s One Manhattan Square

José Cuervo owner Juan Beckmann Vidal and 1010 Park Avenue (Credit: Getty Images, StreetEasy)

Mexican billionaire buys Park Ave pad for $25M amid shopping spree

From left: 241 East 73rd Street, 1514-1528 First Avenue, and Extell Development's Gary Barnett (Credit: Google Maps)

Here’s what the $10M–$20M NYC investment sales market looked like last week

235 West 48th Street and Carlyle Group managing director Jason Hart (Credit: Google Maps and Carlyle Group)

Carlyle takes majority stake in Ritz Plaza rental building for $251M