The Real Deal New York

Deal for Williamsburg site near Domino Sugar hits snag

Shulem Herman claims seller canceled contract for $36M buy
By Mark Maurer | Twitter_logo_blue copy October 12, 2015 05:32PM

Williamsburg investor Shulem Herman is suing the owner of a development site that sits next to the Domino Sugar Factory megaproject for allegedly backing out of a deal that was already in contract.

Herman claimed he entered contract in September to acquire five contiguous tax lots with frontage on South 2nd Street, South 3rd Street and Wythe Avenue for about $36 million, according to sources familiar with the deal.

In a complaint filed Friday in New York State Supreme Court in Kings County, Herman accused Bruce Terzano, a Long Island-based landlord who runs Glen Cove Arena Taxi, of breach of contract.

According to the suit, Herman signed a contract Sept. 2 and deposited an agreed-upon down payment. On Oct. 5, Terzano told Herman he would no longer go ahead with the sale and the contract was now void, the suit claims.

The site, home to a mix of vacant lots and low-rise structure, offers more than 45,000 buildable square feet, property records show. The Addresses Are 60 South 2nd Street and 41, 43, 45-51 and 53 South 3rd Street. Popular coffee shop Freehold occupies one of the properties. Terzano assembled the package between the 1970s and 1990s, records show.

Terzano’s “conduct was unreasonable as it was not in line with industry norms, outrageous and wanton,” Herman said in the suit.

Marcus & Millichap’s Shaun Riney, who is representing the seller, declined to comment, as did Terzano’s lawyer Michael Landsman of Holm & O’Hara and Herman’s lawyer Aaron Twersky of Twersky PLLC.

Terzano, who controls the entity J.B.J. L.L.C., had scrapped plans in 2012 to construct a pair of six-story, mixed-use properties on the site. Herman’s plans are unclear.

Next door, Two Trees Management is developing its 11-acre, 2.2 million-square-foot Domino Sugar complex, slated to contain 2,300 apartments and 500,000 square feet of commercial space. That project too has faced lawsuits. In April, a judge rejected the fourth lawsuit from the site’s former co-owner the Katan Group, which repeatedly sought to halt the sale.

Herman also owns the former home of True South Bookstore at 492 Nostrand Avenue in Bedford-Stuyvesant.