Criterion selling Astoria dev site to Cape Advisors for $85M: lawsuit

Bassuk Org., Greystone EB-5 claim Shibber Khan's firm backed out on $230M in construction financing

Mar.March 06, 2018 01:45 PM

Criterion’s Shibber Khan and 30-77 Vernon Boulevard (Credit: Google Maps)

Shibber Khan’s Criterion Group is selling its 711-unit residential development site on the Astoria waterfront to Cape Advisors for $85 million, according to court documents.

Criterion is also facing a lawsuit from the Bassuk Organization and Greystone EB-5, who claim the developer backed out on nearly $230 million in construction financing the brokers had secured for the site.

Representatives for Criterion and Cape Advisors could not immediately be reached.

The property in question spans nearly a full block at 30-77 Vernon Boulevard (also known as 30-80 12th Street), a short walk from the Astoria ferry stop. Criterion purchased the site in 2014 from Vernon Realty Associates for $57 million.

The developer last year sought financing to build a 711-unit project on the site, and Bassuk lined up a $215 million construction loan from Mack Real Estate Credit Strategies, Bassuk claims in its lawsuit. Greystone’s EB-5 division also secured $14 million in funds from the popular cash-for-visa program in escrow with a total of $20 million in subscriptions, according to the lawsuit.

But unbeknownst to the brokers, Criterion was working to sell the site as they secured term sheets for the financing, they allege. Bassuk — led by former Singer & Bassuk principal Richard Bassuk — and Greystone claim that Kahn assured them he was moving forward with the development, but that one of the project’s investors – tech entrepreneur David Lubinitsky – was quietly working alone to market the site for sale. (In 2014, Lubinitsky paid $88 million for an Astoria rental building Criterion developed and put it back on the market for $135 million two years later.)

Greystone EB-5 said it received a call in November from Cape Advisors managing partner David Kronman, who indicated his company “was evaluating a potential acquisition of the project site and that Khan had authorized him to contact Greystone EB-5.”

“When Greystone EB-5 notified Khan about this call, Khan stated that he was not actively marketing the project site but that Lubinitsky was claiming Khan had been impeding a sale of the project site, so Khan wanted to show ‘cooperation’ in the process,” the lawsuit claims. “However, Khan reiterated his, [Russian investor Efim Kogan’s] and Criterion’s commitment to developing the project and closing on the loan financing.”

The brokers claim the commitment from Mack expired at the end of last year, and are suing for a $5.5 million breakup fee.

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