The Real Deal New York

Landlord accused of harassment-by-mold pushes forward with Tribeca condo

David Dilmanian, who also pleaded guilty to property auction bid rigging in the 1990s, is the developer
By Will Parker | September 07, 2017 01:20PM

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15 Jay Street (Credit: Wikimapia)

UPDATED: Thurs. Sep. 14, 6:30 pm: A Tribeca landlord who was accused of allowing toxic mold to grow inside 15 Jay Street is now moving forward with a plan to create luxury condominiums at the address, an offering plan filed with the New York Attorney General’s office shows.

David Dilmanian’s Metropolitan Homes, an active condo developer in Brooklyn, wants to bring five apartments to 15 Jay Street, with a total sellout price of $25.5 million. The project is a conversion of the existing five-unit rental property.

Dilmanian and partners acquired the 11,000-square-foot loft building in 2007, paying $2.3 million. Developer Joseph Davoudzadeh is listed as a signatory in city records.

15 Jay Street is just three doors down from the Staple Street Skybridge building, where a $50 million home hit the market in 2015.

In 2012, Dilmanian settled with two of the building’s rental tenants, who had sued his company in federal court alleging it systematically allowed unattended water leaks and a ceiling collapse to give rise to toxic mold; an attempt, the tenants said, to force them out. The loft residents further complained that growths caused them various maladies, including liver damage and “inadvertent body jerking.” One tenant claimed he had been diagnosed by a doctor with mycotoxicosis, or poisoning from exposure to fungal toxins. Court records show the pair sought more than $1 million in damages and had fled the building to live in Pennsylvania.

A spokesperson for Dilmanian, however, denied the harassment allegations and told TRD that the tenants voluntarily left the building after agreeing to buy-out.

The developer is active in Brooklyn, where last year it filed an offering plans for a 71-unit condo at 2100 Bedford Avenue. The project passed the 15 percent-sold milestone in June.

In 1999, David pleaded guilty to federal charges of bid rigging foreclosure auctions, a decade-long scheme involving several Brooklyn and Queens real estate brokers and investors. The year prior, Davoudzadeh was charged with tax evasion in connection to bid rigging.

This story was updated to include comment from Dilmanian’s spokesperson.