A developer in Queens is suing to force the sale of a stake in a Flushing site near the Sky Parc condominiums, claiming the owner refuses to honor their purchase agreement all while holding his deposit hostage to get a better deal.
New Jersey-based developer Mao Hua Dong claims Xingmei Chen’s American Chengxing Investment Management Group refuses to sell its effective 38 percent ownership stake in a pair of properties at the edge of Downtown Flushing, a complaint filed Thursday with the Queens County Supreme Court shows.
The properties – a building-supply warehouse at 40-70 Delong Street and vacant lot next door at 131-02 40th Road – sit directly across from the Grand at Sky View Parc, the second phase of the 3.3 million square foot mixed use project being developed by Onex Realty Partners.
The properties could be combined for either 272,000 buildable square feet of residential space or 375,000 square feet of commercial space.
Dong, who is behind a project to develop a 12-story mixed-use building in Kew Gardens, entered into an agreement with Chen’s Chengxing company January 15 to buy the minority stake for $7.4 million.
Dong claims that after the two sides signed a contract, Chengxing requested an additional payment of $4.37 million, otherwise the seller would not honor the agreement.
As per the agreement, Dong claims, he made a deposit directly to Chengxing, instead of putting it in escrow.
“Without choice,” the lawsuit claims, Dong agreed to the terms and proceeded to deliver three checks totaling $1.18 million to Chengxing.
Dong says Chen received the payments, but refuses to accept a second deposit and complete the sale, all while continuing to hold the original deposit.
Around the closing date of January 29, Chengxing’s attorney sent a letter saying the agreement was void and unenforceable, but offered sit-down to discuss a potential sale.
“Through coordination of the attorneys, the parties scheduled a four-way sit-down meeting at Defendant Chenxing’s attorney office, however, few hours before such meeting, Defendant Chengxing cancelled in bad faith without rescheduling,” the suit claims.
Dong is suing to enforce the purchase agreement and to recover damages of $5 million.