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

TRD 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
329 Broadway and JLJ CEO Jonathan Lewis (Credit: Syndicate Architecture via CityRealty, Google Maps)

Williamsburg developer lands $57M refi to complete 329 Broadway

100 South 4th Street in Brooklyn

Meadow Partners sells W’Burg rental
for $61M

Joseph Chetrit and 500 Metropolitan Avenue

Chetrit Group lands $133M refi for Williamsburg resi, hotel project

image of menachem stark and mugshot of erskin felix

Second man convicted in gruesome murder and kidnapping of Williamsburg landlord

Williamsburg market rebounds after reversal of L train shutdown

Lightstone kicks off Opportunity Zone fund with hotel project in Williamsburg

Hampshire picks up Williamsburg waterfront site for $50M

Investors make offers on Toby Moskovits’ Williamsburg Hotel: report

arrow_forward_ios