The Real Deal New York

Judge clears path for Starrett City sale

Lawsuit by Deane scions dismissed
January 03, 2018 09:05AM

A New York Supreme Court judge on Tuesday dismissed a lawsuit seeking to block the $905 million sale of Starrett City, the largest federally subsidized housing complex in the U.S.

Minority owners of the housing complex, including children of the late Disque Deane, sued their stepmother Carol Deane and other managing partners in September, alleging that they agreed to a sale below market value. Judge Saliann Scarpulla ruled that the plaintiffs failed to prove they suffered irreparable harm by the sale.

State and federal officials still need to approve the deal, which 70 percent of the limited partners and owners signed off on.

Andrew MacArthur’s Brooksville Company and Rockpoint Group, who went in contract for the complex in early September in a deal brokered by Cushman & Wakefield’s Doug Harmon, expect to take over the property in two to three months, the New York Times reported.

Harmon suggested the managing partners not put the complex up for auction but instead deal directly with a small group of potential buyers. Brooksville and Rockpoint made a bid and there were no negotiations with any other bidder. Real estate firms Belveron Partners and LICH Investment Group, aligned with the children of Disque Deane, later bid $25 million more than Rockpoint and Brooksville. But they were rebuffed.

President Trump owns a 4 percent stake in the project, raising the specter of a conflict of interest. “The president is on both sides of the negotiation — he oversees the government entity providing taxpayer funds and he pockets some of that money himself,” Representatives Hakeem Jeffries and Elijah E. Cummings wrote in a July letter to the trust holding Trump’s assets and to Department of Housing and Urban Development Secretary Ben Carson.

The complex, with 5,581 units across 135 acres overlooking Jamaica Bay in Brooklyn, is the largest federally subsidized housing facility in the country. [NYT]Konrad Putzier