The Republic of Senegal backed out of a plan to develop a mixed-use office and residential condominium tower in Midtown with Glacier Global Partners, the New York City-based real estate investment firm claims in a new lawsuit.
Early this year, Glacier and Senegal inked a letter of intent to form a joint venture to develop two parcels of vacant land the government owned at 227-235 East 44th Street, between Second and Third avenues, according to the complaint, filed in August in Supreme Court but recently unsealed.
Senegal would contribute the land, while Glacier would foot the bill for construction and administration costs, as well as secure financing for the project, according to the letter, cited in court papers.
While the parties were equal partners, Glacier was entitled to first dibs on some of the cash flow generated by the project, the complaint states. And Senegal allegedly agreed to a six-month exclusivity period where it would refrain from signing an agreement with another developer.
The trouble came when Senegal allegedly tapped Avison Young to market the joint venture opportunity to developers that would give the country better financial terms. Avison apparently connected Senegal with Ron Yeffet of construction company GSR Concrete, and the parties then entered into a joint venture, according to the suit.
Unfortunately for Glacier, the firm never signed an official written contract — though the terms were included in the letter of intent and confirmed verbally, the suit says.
A spokesperson for Avison Young did not immediately respond to a request for comment. An attorney for Senegal declined to comment, while Glacier’s attorney did not immediately respond.
Development plans from 2011 show a mixed-use, 21-story project with 12 residential units and an office component. It was not clear if those plans had been updated. Senegal bought the sites for $23.9 million in 2009, city property records show.
Glacier claims that it only became aware of Senegal’s deal with GSR when the government’s attorneys failed to respond to a written draft of the joint venture agreement. Instead, Senegal began introducing new terms into the agreement which Glacier deemed to be “poison pills.”
For instance, they suggested that Glacier should be prohibited from investing in, lending to or participating in any other multi-family development ventures within a radius of the property that spanned from East 34th Street to East 52nd Street between Lexington and First avenues, the complaint alleges. They also sought to change the agreed-upon payout structure, Glacier says.
Senegal sought to officially terminate the agreement it had with Glacier in April, according to the complaint.
Glacier is now seeking a judgment from the court declaring that Senegal is contractually bound to the development agreement and compelling the government to transfer the property into a joint venture with Glacier.
Meanwhile, a townhouse property formerly owned by Senegal hit the market today for $17.5 million. Henry Justin, CEO of HJ Development purchased the building, at 46 East 66th Street, in May from Senegal, for $9 million. Massey Knakal Realty Services has the listing for the property