The Real Deal New York

Heritage’s Toby Moskovits battles with partner on projects

Developer accuses Joel Gluck, others of placing W'burg and LIC plans in peril
By Mark Maurer | Twitter_logo_blue copy April 16, 2015 02:30PM

Heritage Equity Partners’ founder Toby Moskovits is battling with her partner Joel Gluck over two projects she claims are in “imminent peril,” and is suing him along with investor Yoel Goldman and mortgage brokerage Meridian Capital Group.

The Brooklyn-based developer filed two separate lawsuits in New York State Supreme Court in January and February. The projects in question are a 170-unit Long Island City residential building at 41-21 28th Street, and the church-to-rental conversion known as the Spire Lofts at 163 North 6th Street in Williamsburg, respectively.

In the former, she alleged that Spencer Equity’s Gluck refused to have his entity, Spencer Equity II LLC, sign consent documents for a $2.5 million bridge loan, which led the lender to insist that the amount be returned.

As a result of these financial setbacks, the Long Island City project is at risk of being stalled, Moskovits claims. The developers could lose a tax abatement if partial construction of the foundation is not done by June, due to a change in city policy. If the abatement is lost, the value of the property will be “impaired dramatically,” Moskovits claims.

Heritage, along with Gluck and Goldman, acquired the Long Island City site for $17 million in 2013. The property is zoned for both residential and manufacturing use.

Last month, Judge Lawrence Knipel granted Moskovits’ motion for a preliminary injunction restraining Gluck from transferring or pledging any membership interests in the entities associated with the project. The judge, however, denied a motion ordering the removal of language in the bond offering.

A hearing on Gluck’s motion to dismiss the complaint is scheduled for May 15.

In the Spire Lofts complaint, Moskovits accused Gluck and Goldman of conspiring with Meridian, the Ralph Herzka-led mortgage brokerage, to market a $42 million loan “to encumber the property,” despite her efforts to stop them. She claimed that she did not agree to the terms of the financing because other prospective lenders such as Capital One and Bank of America were offering more favorable terms. Gluck and Goldman then allegedly excluded her from negotiations and proceeded to work with Meridian.

Like the Long Island City lawsuit, the Spire Lofts complaint makes claims about an improper bond offering and improper transfer of the interest.

Moskovits is seeking $20 million in damages from Gluck in the first suit, and $20 million from Gluck and Goldman apiece in the other.

Moskovits and Meridian Capital declined to comment.

“We believe the claims are totally without merit and we believe the lawsuits will be dismissed in their entirety in the not-too-distant future,” said Katsky Korins’ Mark Walfish, who is representing Gluck.

Goldman is named as a defendant in both lawsuits, but the only claims made against him are in the Spire Lofts complaint. In the former, Goldman submitted an answer to the court in which he largely denied knowledge sufficient to form an opinion on the claims. In the latter, Goldman, as well as Meridian Capital, motioned to dismiss the claims. The defendants also motioned for the court to reject a Bank United subpoena for all documents and communications pertaining to the Meridian loan.

Moskovits, formerly a venture capitalist, formed Heritage in 2008. The firm has been busy in her native Brooklyn, with plans to construct a nearly 400,000-square-foot office building in Williamsburg and the 150-room Williamsburg Hotel at North 10th Street.