The saga of 111 Washington Street now includes a bitter lawsuit between father and son.
For years, plans to develop the large Financial District site started and stopped. Now, Richard Ohebshalom is suing his father, Fred, for trying to push through the sale of the property for far less Richard thinks it’s worth.
In a suit filed March 15, Richard said his father is using the site as a pawn in an ongoing dispute between them. In particular, he alleges that Fred — founder of Empire Management — wants to sell 111 Washington for the “woefully deficient” price of $148 million “in a bad faith effort to extract concessions from Richard.”
The Ohebshaloms are partners in several properties, including 111 Washington, which Richard’s Pink Stone Capital bought for $57.5 million in 2011. Pink Stone picked up the defaulted note from New York Community Bank, and then bought up another 200,000 square feet of air rights to support a 362,000-square-foot residential or mixed-use development. Under an operating agreement for the property, Fred can’t sell the site without his son’s consent, the complaint states. Further, a 2013 agreement caps Fred’s share of any proceeds if the building is sold for more than $120 million.
In January, Fred agreed not to sell the property while they continued to hammer out a settlement, according to court documents. But instead, the complaint alleges, he began to “secretly negotiate a wholly-inadequate sale” of the property. Last week, Fred’s attorneys advised Richard that his father intended to sell the property to a “Chinese buyer” for $148 million.
In the complaint, Richard argues that not only does Fred lack the authority to sell, but also that the property is worth at least $180 million, as was detailed in the 2013 agreement. Still, Fred listed the property for $170 million and previously negotiated with a buyer who offered $170 million, the complaint said.
“Fred’s pursuit of the proposed sale is motivated solely by his desire to increase leverage over Richard in connection with settlement negotiations on unrelated family and business matter,” the complaint states.
Representatives for Fred declined to comment, while representatives for Richard did not respond to requests for comment. According to the complaint, the Ohebshaloms have sparred over how to manage several of their properties and in the past year, as part of settlement talks, they discussed the possibility of exchanging some co-owned properties, including 111 Washington.
Plans for 111 Washington have changed several times over the years.
Shortly after buying the site, which is two blocks south of the World Trade Center, Pink Stone said it would develop a 54-story rental tower with roughly 500 units.
But in March 2014, Pink Stone put the site on the market for $260 million, only to pull it off the market, file building plans for the tower and then re-list the development site a year later. That time, listing broker Bob Knakal said he expected it would fetch north of $170 million.