Flank tried to scoop up in-contract Williamsburg deal: lawsuit

Investor claims owner, tenant conspired to bring in new buyer of site near Domino Sugar

New York /
Jan.January 21, 2016 02:12 PM

After his lawsuit over a botched South Williamsburg deal was dismissed, investor Shulem Herman is now setting his sights on the developer that allegedly attempted to swoop in on buying an assemblage for which he was already in contract.

Herman filed a complaint Friday in New York State Supreme Court, claiming that architecture and development firm Flank was “determined to own the property, even if it meant using deception and fraud.” The development site – consisting of five contiguous tax lots with frontage on South 2nd Street, South 3rd Street and Wythe Avenue – is next to the Domino Sugar Factory megaproject.

In October, Herman filed a suit against Bruce Terzano, the site’s owner and a Long Island-based landlord who runs Glen Cove Arena Taxi, accusing him of breach of contract. Herman claims he signed a contract Sept. 2 to buy the parcels for $36 million. On Oct. 5, Terzano told Herman he would no longer proceed with the sale, that suit said.

On Jan. 14, a judge approved a motion to dismiss the complaint.

The following day, Herman returned with a new, expanded suit. In addition to Terzano, defendants now include Flank and Brice Jones’ Jones Hospitality Group, which leases space on two of the parcels.

According to the suit, Jones agreed to transfer and assign a majority of its capital stock and/or ownership interest in his firm’s entity BKLN Garden LLC to Flank. Jones did this purely as a method for Flank to elect under its right of first refusal, ignoring the fact that such an assignment was in breach of both the terms of Jones’ lease and Terzano’s contract with Herman, the legal filings claim.

Herman alleges that Terzano intentionally concealed the recent transfer and of Jones’ ownership from him. Terzano and Jones “participated in a scheme to cover up and disguise the true identity of” Flank, a third-party purchaser, Herman claims.

Marcus & Millichap’s Shaun Riney, who is representing the seller in the deal, said, “It was a competitive campaign and neither prospective buyer wants to lose the site.” Riney declined to comment on the lawsuits.

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 and bar Freehold, of which Jones is a co-owner, occupies one of the properties. Terzano assembled the package between the 1970s and 1990s, records show.

Attorneys for Flank and Terzano declined to comment, while an attorney for Jones could not be reached.

Flank is a Chelsea-based firm that has become one of the most active residential developers in Brooklyn. Flank and the Carlyle Group are developing the Boerum, a 20-story, 128-unit property in Boerum Hill.


Related Articles

arrow_forward_ios
60 South 8th Street, #PH3 and 57 Wyckoff Street (Streeteasy)
Not your average row house: $10M home tops Brooklyn market
Not your average row house: $10M home tops Brooklyn market
Toby Moskovits and Michael Lichtenstein with the Williamsburg Hotel (Google Maps, Sasha Maslov, LinkedIn)
Judge: Moskovits, Lichtenstein can’t be trusted with Williamsburg Hotel
Judge: Moskovits, Lichtenstein can’t be trusted with Williamsburg Hotel
NH Investment & Securities CEO Jeong Young-Chae in front of 275 South 5th Street in Williamsburg (Douglas Elliman, Wikimedia Commons/United States Mint, Getty Images, iStock)
Pile of dimes: Korean investor poised to purchase Williamsburg rental
Pile of dimes: Korean investor poised to purchase Williamsburg rental
Google to open second retail space in Williamsburg at 134 North 6th Street (Google Maps)
Google to open retail store in Williamsburg
Google to open retail store in Williamsburg
The William Vale Hotel in Williamsburg (The William Vale, iStock/Illustration by Steven Dilakian for The Real Deal)
Zelig Weiss returns with bid to buy William Vale in Williamsburg
Zelig Weiss returns with bid to buy William Vale in Williamsburg
(Slate Lending, Google Maps)
Shuttered Williamsburg Key Food readies for multifamily dev
Shuttered Williamsburg Key Food readies for multifamily dev
Clockwise from top left: 277 Fifth Avenue, 60 North 6th Street in Brooklyn, 127 Kent Avenue in Brooklyn and 515 West 38th Street (The LX Collection, L3 Capital, Google Maps)
Tile maker’s deal in NoMad leads mid-market sales
Tile maker’s deal in NoMad leads mid-market sales
David Rubenstein with 25 Kent Avenue (Rubenstein, Google Maps)
Rubenstein reels in $178M refi at 25 Kent
Rubenstein reels in $178M refi at 25 Kent
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...