The Real Deal New York

Construction manager sues Bridgeton Holdings for $8.5M over Tribeca hotel conversion

Atlantic State Development Corp. claims developer botched job, then shut the general contractor out of the site
By Rich Bockmann | March 17, 2017 02:30PM

396 Broadway and Bridgeton’s Atit Jariwala

UPDATED, March 19 2:32 p.m.: The general contractor on a nearly $20 million hotel conversion of a Tribeca office building is suing Bridgeton Holdings, claiming the developer dragged its feet on the project and then locked the general contractor out of the site.

Westchester County-based Atlantic State Development Corp. is suing Bridgeton for $8.5 million in unpaid fees and damages over the conversion of the 10-story, prewar office building at 396 Broadway, according to a complaint the company filed in Manhattan Supreme Court on Friday.

Bridgeton CEO Atit Jariwala called the claims “absolutely meritless” and said his company had already been preparing a lawsuit against Atlantic before the construction manager filed its complaint.

The NoMad-based developer bought the 10-story prewar office building from Isaac Chetrit in 2013 for $42 million, property records show, and planned to pump a little more than $19 million into converting the 61,000-square-foot building into a hotel, according to Atlantic State’s complaint.

Bridgeton entered into a construction management agreement with Atlantic in early 2015, but things soon started to go south, the GC claims.

The developer failed to lock down financing for the project in a timely manner and make payments on time, Atlantic claims. The developer also required Atlantic and its contractors to do work outside the agreement and failed to inform the construction manager of changes on time, Atlantic alleges.

Bridgeton failed to provide “reasonable, timely and unobstructed access to the work area” and issued “excessive and unreasonable changes and stoppages to the work” that caused Atlantic to work in an inefficient manner and log costly overtime, the lawsuit claims.

In July, Bridgeton issued a temporary stop to construction at the site, hired a 24-hour security detail and told Atlantic to “refrain from entering the project site or removing any material or equipment.”

Jariwala said that construction is in full swing with a new construction manager, the Rinaldi Group, and the four-star hotel is expected to be completed in early 2018.