After putting in on the market in 2013, Millennium Partners and Westbrook Partners finally sold the former Ritz-Carlton at Battery Park City last fall. But legal headaches surrounding the property have continued to hound them.
New York-based Luxury Property Group and Florida-based Real Estate Wealth Advisors say they introduced Urban Commons, a Los Angeles investment firm, to the sellers and remained involved in the sale throughout the negotiation process, but were never paid a commission for their efforts.
“The consummation of the sale took approximately 18 months due to issues with unions and the termination of the management agreement and branding of the hotel,” a complaint filed with New York State Supreme Court on Wednesday states. “The sale of the Property to Purchaser by Defendants was a direct and proximate result of the services rendered by Plaintiffs.”
The hotel at the base of 2-10 West Street in Lower Manhattan, which includes 298 rooms across 12 floors, was put on the market in 2013 with an asking price of $200 million. In what appeared to be their first New York City acquisition, Urban Commons closed on the purchase for a bit more than $147 million in October.
A three percent commission on the sale would come out to about $4.5 million. The brokerages are seeking a total of over $13 million damages on three separate causes of action.
“This is a frivolous lawsuit, which completely ignores the terms of the agreement which was signed,” said Janice Mac Avoy of Fried, Frank, Harris, Shriver & Jacobson, who represents Westbrook. “Westbrook honors its obligations to brokers.”
The plaintiffs’ attorneys did not immediately respond to a request for comment.
This isn’t the only legal dispute the former owners are facing because of the hotel. Last March, residents of the building’s upper-floor condos sued the owners over the hotel’s change in branding, from Ritz-Carlton to an ostensibly less prestigious brand, Leading Hotels of the World.
The owners dismissed this as “the petulance of multi-millionaire residents who are unhappy with the change of their neighbor from one luxury hotel brand to another,” while the residents argued that the owners were trying to run the hotel “into the ground” to justify a residential conversion. That lawsuit is ongoing.