The Real Deal New York

Bauhouse principal sues Herrick Feinstein, gets sued by contractor on same day

Developer lost its skyscraper project at 3 Sutton Place more than a year ago
By Will Parker | January 11, 2018 01:50PM

Joseph Beninati and renderings of 515 West 29th Street (Credit: CG Architects)

It’s a busy day for the lawyers representing Bauhouse Group, the fallen developer of 3 Sutton Place that lost the property to its lender Gamma Real Estate at a foreclosure auction in 2016.

Two separate lawsuits involving Bauhouse and its principals were filed in Manhattan court on Thursday to litigate disputes at 3 Sutton Place and 515 West 29th Street.

CCC Renovation, a contractor Bauhouse employed at its 515 West 29th Street luxury condominium project, sued the developer on Thursday claiming $229,000 in unpaid construction fees. The company says that in March it stopped doing work at the site, which included brick masonry and other jobs, because Bauhouse simply stopped paying.

Bauhouse, led by Joseph Beninati, acquired the commercial building at the site near the High Line in 2013 and then moved to build a 12-unit boutique condo designed by SCDA Architects. The building topped out early last year, New York Yimby reported. An offering plan filed with the New York State Attorney General’s office shows the developer is looking to score a whopping $108 million for the 12 units. No apartment sales appear to have closed yet, however.

McGowan Builders, a construction company, is also a defendant in CCC’s suit. Beninati and his attorney did not respond to requests for comment, nor did CCC’s attorney.

Also on Thursday, Bauhouse Group principal Daniel Lee sued Herrick Feinstein attorneys Richard Kalikow and William Fried, alleging they conspired to ensure Bauhouse’s failure at 3 Sutton Place for the benefit of Gamma, which is run by the Kalikow family. Beninati and co-principal Chris Jones filed a similar suit against Herrick Feinstein last year. Both suits allege a “loan to own” scheme.

Bauhouse’s attorney James McCarthy did not respond to a request for comment.

A spokesperson for Herrick Feinstein said “Bauhouse’s principals are solely responsible for their problems, no matter how hard they try to blame their lenders and advisors. A bankruptcy court already found that their claims lack merit, and we expect that every one of their latest claims will be dismissed as well.”

In August, The Real Deal reported that Jones left the country following a court order that Bauhouse principals pay more than $24 million in debts to Gamma.

Gamma is pressing forward with its contested skyscraper at 3 Sutton Place, but the City Council approved a rezoning late last year that will limit the project’s scale by requiring nearly half of the total square footage to be contained in the first 150 feet of building height, making the planned 850 foot tower unfeasible. Gamma co-founder Jonathan Kalikow is appealing the rezoning, which he called “spot zoning.” The company had nearly completed the base the project prior to the ruling, he said in November. Work is halted in the meantime.