Nine months after AmBase Corp. sued JDS Development and Property Markets Group for allegedly trying to dilute its stake in the supertall condo project 111 West 57th Street, JDS and PMG have returned the favor.
In a lawsuit filed in New York Supreme Court on Tuesday, the two firms accuse AmBase of withholding “consent to necessary project refinancing” unless JDS and PMG “agreed to pay defendants a sum of money to which defendants were not contractually entitled.”
JDS and PMG seek unspecified damages. Both firms declined to comment. An attorney representing AmBase did not respond to a request for comment.
The Real Deal first reported in May 2015 that AmBase, a small real estate investment trust that joined 111 West 57th Street as an equity partner, did not meet several capital calls for the project. In response, JDS and PMG moved to dilute AmBase’s stake.
In April 2016, AmBase sued JDS and PMG for $105 million, alleging that the capital calls were unnecessary and part of a “scheme to increase their ownership interest in the joint venture at the expense of AmBase.” That case is still ongoing.
The partners landed a $400 million senior loan from AIG and $325 million in mezzanine financing from Apollo Global Management to fund the 1,418-foot-tall tower, which has a projected sellout of $1.45 billion.
In March 2016, PMG’s Kevin Maloney told Bloomberg that the partners were delaying the launch of sales amid broader weakness in the luxury condo market. “If the market were red-hot, people would be buying off plans, throwing checks down, and it’d be great,” he said. “But if you have a market where you think marketing would be ineffective for now, why would you launch and spend the money? Wait.”