Kalikow to Beninati: “You’ve f*cked with the wrong person”

Gamma Real Estate chief dishes on 3 Sutton Place and dealing with his debtor, Joseph Beninati
September 27, 2017 02:38PM

Joseph Beninati and Jonathan Kalikow

Civilized nations are expected to adhere to the “principle of proportionality” when they engage other nations in war.

But when it comes to Gamma Real Estate’s Jonathan Kalikow and his debtor Joseph Beninati, the fallen developer of 3 Sutton Place, the code of war be damned.

“I believe in disproportionate retaliation,” the Kalikow scion told Commercial Observer. “Like ‘Count of Monte Cristo,’ but to the 10th power. As in, now you’ve fucked with the wrong person.”

Beninati and the partners of Bauhouse Group owe Gamma millions following its foreclosure at 3 Sutton Place, where Gamma was the developer’s principal lender, providing $147 million in financing.

Before defaulting on its loans and later losing control of the development, Beninati fought hard against the eventual foreclosure sale in which Gamma took control of the site in December. He attempted to declare bankruptcy and brought a 26-count lawsuit against Gamma, claiming its lending practices were atypical and breached contract. All but one of the counts were later dropped.

In the interview with CO, Kalikow claimed to have known was something off about Beninati early on. But he said he saw enough value in the project to keep up the relationship (though he denied that it was a “loan to own” situation).

“Some of the ridiculous things he was asking for led us to believe that he would never find a partner,” Kalikow said, mentioning Beninati’s request that the cash basis in the partnership be reworked so as to win him a $50 million windfall, a request that could only be realized if Beninati agreed to sell the site to Gamma, Kalikow said. Beninati, set on being the developer, refused.

“It was very clear that the money was not nearly as important to him as his name in lights,” Kalikow said. Beninati did not respond to CO’s requests for comment.

The saga is a long and tortured one, and despite significant community opposition to the East Side skyscraper—and dragging litigation with former partners—Kalikow is moving forward. “We’re prepared to build it,” he said. [CO] — Will Parker