The Real Deal New York

Madison Advisory Group claims contractor on South Harlem condo conversion tried to extort extra funds by delaying project

Developer is seeking nearly $5M in damages
By Kathryn Brenzel | April 16, 2018 06:53PM

320 West 115th Street (Credit: H5 and Ariel Property Advisors)

320 West 115th Street (Credit: H5 and Ariel Property Advisors)

Madison Advisory Group claims a construction company working on its South Harlem condominium conversion caused nearly $5 million in damages to the project through a series of delays, shoddy work and by repeatedly trying to extort money from the developer.

All Building Construction Corp. abruptly abandoned work at 318-320 West 115th Street in August 2016, after mismanaging the project in “a manner so incompetent — and in fact illegal — that it can hardly be overstated,” a new lawsuit filed in Manhattan State Supreme Court alleges. The company improperly installed the roof and foundation wall, leading to leaks, among several other issues, according to the lawsuit.

Steve Kirschenbaum, president of Madison, declined to comment. Emails and calls left for ABCC representatives were not immediately returned.

The company also allegedly failed to pay subcontractors north of $700,000, despite claims otherwise. Alex Getelman, a senior executive at ABCC, told Kirschenbaum in July 2016 that “every nickel” that came from Madison was going to the subcontractors, according to the lawsuit.

The complaint also states that Getelman spent time in prison after being convicted of stealing $1.2 million from Citadel Investment Group by inflating construction bills to the hedge fund through his company, Aragon. He was convicted on fraud and larceny charges, data from the New York State Department of Corrections and Community Supervision indicates.

Madison alleges that ABCC threatened to stop the project and refused to deliver flooring material to the site if the developer didn’t provide an addition $1.6 million. The complaint states that Kirschenbaum had reminded the contractor that their agreements didn’t include additional funds and asked if they were engaged in “change order contracting,” to which Getelman allegedly replied: “Yea, we’re going to bang you out on this one.”

The developer also claims ABCC extorted additional funds to keep the project going.

ABCC allegedly acknowledged there was an issue, pointing to a voicemail left by ABCC’s Ed Campanella for Kirschenbaum:

“I really need to sit down with you in a room … and get this thing, at least try to get worked out, cuz’ you got us by the balls, you got us by the balls, here…I call surrender, white flag…let us finish the fucking job, I can pay off the subs over time …You got us by the balls. I hafta surrender. There’s nothing we can do,” he said, according to the lawsuit.

In June 2015, Madison unveiled plans to combine two prewar townhouses into a six-unit condo building. ABCC was supposed to complete most of the project by Nov. 26, 2015. According to documents filed the City’s Department of Buildings, Hunter Roberts Construction Group has taken over the project.

The developer is seeking at least $4.96 million in damages from ABCC.