Whose backyard is it anyway? Inside the meltdown at New York YIMBY

Amid a feud between co-owners, the popular pro-development blog is in crisis

Mar.March 27, 2017 07:00 AM

Developers in this city looking to tackle a new project are used to battling an army of preservationists. But in 2011, they found an unexpected ally: Nikolai Fedak, a lanky, hyperkinetic 20-something whose website, New York YIMBY, became an unapologetic advocate of real estate development.

“Zoning is the problem, not development in this city,” Fedak said in a 2014 interview with Politico. “I think people don’t really understand that.” By then, he had become New York real estate’s best known libertarian polemicist. He spent his days taking on zoning-hugging preservationists in public forums and made a pretty good living – advertisers included the likes of Douglas Elliman, TF Cornerstone and Morris Adjmi – charting the course of the city’s skyscrapers on his increasingly popular website.

But late last year came a major setback. Fedak had a fallout with his business partner, Dan George, an investor, equal shareholder and CEO in an enterprise called YIMBY, INC, which George and Fedak entered into in 2014. The dispute saw Fedak lose control of the newsroom, and pushed him into a part-time gig in public relations. And if the legal battle drags on, it could spell an unceremonious end for what is arguably the city’s loudest pro-development voice.

Neither Fedak nor George would speak to The Real Deal on the record. But through interviews with former clients, court records and other sources, two conflicting narratives of how things soured have emerged.

One source familiar with the dispute said it all started when Fedak requested information about the company’s finances from George. In an affidavit Fedak filed in court, he said that in September he stopped receiving his salary from George’s firm, Drive Digital. When he confronted George about the matter, he wasn’t given an adequate explanation, according to the affidavit. When Fedak sent George a resignation letter in November, he alleged that George failed to show how $1 million George invested in YIMBY had been spent.

But according to the suit brought by George and YIMBY Inc, Fedak began lashing out and subverting George’s role as company CEO in October. George claims Fedak damaged the company in the process, disrupting the business and violating his terms of employment.

Fedak maintains that he has never had an employee-employer relationship with George within YIMBY – instead, he alleges, George forged documents trying to show that and also stole the YIMBY trademark. For the moment, a federal judge agrees with Fedak that George’s documents are forged and cannot be used to make any claims. Fedak currently has control of the website’s original domain, where no new content has been posted for over a month. George, meanwhile, is running the site on a new domain with a pared-down staff.

Several sworn affidavits by eyewitnesses given in support of George depict Fedak as a man on the verge of a nervous breakdown. According to one from YIMBY shareholder Oleksandr Reheylo, Fedak first approached him in October to ask that he hand over his voting privileges in YIMBY. Reheylo declined, and described Fedak’s move as a “failed coup attempt.”

That same month, George says he told Fedak he could “no longer fund YIMBY’s operating losses” – his affidavit shows that YIMBY’s bank accounts were collectively in the red. Fedak allegedly responded to the news by “walking off the job and stealing company assets,” George claims.

Fedak went even further, George alleges, locking YIMBY employees out of the site’s content management system and social media accounts, “reduc[ing] the access level” of George and a programmer to the company’s email system, tendering his resignation to YIMBY shareholders, and then proceeding to take personal control of YIMBY’s domain. For his part, Fedak says it was George that was cutting his access to various parts of YIMBY’s web operations, not the other way around.

Fedak then went for YIMBY’s ad accounts, according to Reheylo, including those for TF Cornerstone and Moinian Group, both prominent builders of the kind of large-scale towers that Fedak argues for.

A source familiar with YIMBY’s advertising operation shared email correspondences with TRD that appear to show an attempt by Fedak to direct ad payments away from George. George later followed up with this particular client, another email shows, asking that they ignore Fedak. Similar emails by Fedak are included in George’s complaint.

Several YIMBY employees also gave affidavits that paint Fedak as the catalyst of the troubles. One writer said they met Fedak at Maison Kayser in November, where Fedak expressed his intention to run for mayor of New York, giving his YIMBY resignation notice to New York Post real estate reporter Steve Cuozzo in the hopes of garnering press coverage. The writer added that public relations reps began calling and describing Fedak’s behavior as “erratic.”

Affidavits from multiple employees say that Fedak was attempting to subvert George’s authority and aimed to sell YIMBY without George’s inclusion.

Meanwhile, George seems to have succeeded in convincing the managers of the original website’s European server to cut off Fedak’s access. As for YIMBY’s news operation, which has moved to an alternate domain, most of the posting now comes from University of Connecticut student Reid Wilson, and Evan Bindelglass, a former contributor at Curbed. Managing editor Rebecca Baird-Remba left YIMBY and took a position at the Commercial Observer earlier this month. One source in the real estate marketing space said that some developers were suspending their advertising with YIMBY until the dispute is resolved.

In the meantime, Fedak is working part-time for Harriet Weintraub, a publicist with a wide variety of luxury condominium projects, Weintraub confirmed.

A source familiar with Fedak’s thinking said he believes that George “created” all of the sworn affidavits against him. One YIMBY staffer who provided an affidavit, however, told TRD that it was “legit.” Fedak’s attorney, Steve Wagner of Wagner Berkow said, “It’s unfortunate that people who worked so closely with Nikolai have chosen to throw him under the bus for a paycheck.”

George is having a tough time getting the courts to back him. Although at first he secured a temporary restraining order against Fedak, Judge Paul Crotty later ordered a dismissal of George’s claim when George’s Own Attorney Told The Court that the employment agreement filed to prove Fedak’s subordinate role in the company “can no longer be relied upon by me or this court.”

In his dismissal order, Judge Crotty refers to the document as a forgery and also questions George’s claims to the trademark for the YIMBY name, which is short for “Yes in my backyard,” the longbowman’s salute to the anti-development movement known as NIMBYism. Crotty ordered George and YIMBY, Inc to pay Fedak $30,000 in legal fees, which George has tried to appeal. George maintains that document is not a forgery, but a copy for which the original no longer exists.

Fedak is demanding that George show more proof of YIMBY’s financial situation and show where money from investors has been going. According to a transcript filed in the case, Judge Crotty said that George’s case will be referred to the US Attorney’s Office to investigate “committing a fraud on the court.”

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