The Real Deal New York

William Gottlieb Real Estate accuses architecture firm of “blackmail”

The architect previously said it was owed $450,000 and withdrew contracts from 72 projects
By David Jeans | July 02, 2018 05:23PM

327 Bleecker Street (Credit: Google Maps)

In an escalating saga of who-owes-what-to-who, the property management arm of William Gottlieb Real Estate has accused its former architect of “blackmail” after it severed contracts on 72 projects amid a pay dispute.

William Gottlieb, which is involved in developments in Greenwich Village, Meatpacking District and the Lower East Side, alleged that its architect threatened to withdraw from all of its contracted projects, which would lead to the “cancellation of open applications and certificates of occupancy, as well as delayed construction,” according to a court filing last week.

The claim follows an earlier suit filed by FSI Architecture last year, which alleged William Gottlieb owed $450,000 in unpaid work on multiple projects.

The two firms partnered in 2010 and worked on dozens of projects, including 327 Bleeker Street, 11 Abingdon Square, 136 Perry Street and 767 Washington Street. In 2016, however, the architect alleges that William Gottlieb began to delay payments to the firm, built up a large bill and then moved projects to another architect firm.

“We provided excellent services to them and they abused us,” James Cicalo, an FSI principal, said in an interview.

But this week, as the earlier complaint awaited further arbitration, William Gottlieb challenged the $450,000 bill to FSI and charged that the firm’s decision to submit withdraw notices to the housing department as the architect for 72 projects was a “malicious, vindictive act” that amounted to “blackmail.”

The architecture firm plans to file a separate lawsuit against another architecture firm that it says took over its William Gottlieb projects for copyright infringement, according to Cicalo, who would not provide further details.

William Gottlieb did not respond to a request for comment.

The developer was recently involved in another suit brought by a contractor. In 2016, Jepol Construction, Inc., brought a case alleging it was owed $830,000 for construction of 25 sites across the city, according to court filings. The case was later discontinued.

However, William Gottlieb has remained active, particularly in Greenwich Village and the Meatpacking District. Last year it received approval, along with Aurora Capital Associates, to turn five buildings between Washington Street and Ninth Avenue into a 111,000-square-foot commercial development. The two developers recently signed a 15-year, $250 million deal with Restoration Hardware in a 60,000-square-foot space.