The Real Deal New York

Cobble Hill hospital bidder sues over failed Gowanus purchase

Chaim “Harry” Miller acquired contract from development firm LIVWRK in January
By Adam Pincus | May 09, 2014 02:08PM

The top bidder in a disputed process to buy the Long Island College Hospital campus in Cobble Hill is embroiled in another — although much smaller — property acquisition dispute in Brooklyn.

A group including investor Chaim “Harry” Miller, under the purchase entity 130 Third Street Loft LLC, filed the suit in Brooklyn State Supreme Court in February, claiming the New Jersey-based owner HKF, Inc. reneged on a deal to sell the three-story, 60,000-square-foot building at the corner of Bond Street, for an undisclosed sum.

In the court documents, Miller’s company is seeking enforcement of the sale, or alternatively wants at least $10 million in damages.

Miller is also a partner in Brooklyn Health Partners Development Group, a company that is vying to buy the LICH campus from the State University of New York. However, this week SUNY said it would pass over the BHP bid. BHP then filed a lawsuit seeking to block SUNY from striking a deal with another bidder.

The Gowanus building is in an up-and-coming section of Brooklyn, where it drew the eye of former Two Trees Management executive, Asher Abehsera, who with his partner Aaron Lemma formed the development firm LIVWRK last year. The company has been active in the area. Last month The Real Deal reported the firm executed a contract for $21.5 million in Red Hook.

LIVWRK inked the contract to buy 130 Third Street last fall. But in January LIVWRK assigned the contract to Miller’s group, court records said. The closing deadline was set for Jan. 21.

On Jan. 20, Miller’s group asked for a 10-day extension on the closing. The seller demanded $888,889 in exchange for the extension, while Miller offered first $50,000 and then upped that to $100,000. The seller rejected both offers.

HKF told Miller’s group on Jan. 29 that the sale had passed the deadline and thus the deal was in default, and it would keep the deposit. A source said it amounted to $1.1 million.

Miller’s group claims it was prepared to close, but HKF disputes that, for example alleging that the purchasing entity 130 Third Street Loft LLC had not been formed in time for the closing. That charge echoed one made by SUNY last week before it rejected the BHP bid, saying BHP was not prepared to close the deal, a charge BHP vigorously disputed.

The buyer disputes the claim of default, and says it wants to go forward with the deal. HKF did not immediately respond to a request for comment, and Lemma declined to comment.

Jonathan Rich, an attorney with the firm Robinson, Brog, Leinwand, Greene, Genovese & Gluck who is representing Miller’s group, declined to comment beyond noting that no judge had yet become involved in the case.

“This lawsuit is absolutely frivolous,” said HKF’s attorney, Jacques Catafago, of the Catafago Law Firm, said. “After depositions, we expect summary dismissal of all claims and to prevail on [HKF]’s counterclaims.”