A company that played a key role in bringing Amazon and Ikea to a huge e-commerce campus on Staten Island claims a cast of characters conspired to cut it out of another lucrative development on the island.
Staten Island Marine Development, a remediation company, claims it spent a year laying the groundwork to redevelop a former Exxon oil storage facility, formerly known as Port Mobil.
The company, also known as SIMD, now says in a lawsuit that it signed a letter of intent to buy the property at 4101 Arthur Kill Road in January 2019 for $55 million from owner Kinder Morgan, a Houston-based energy infrastructure company.
“Kinder secretly negotiated with other parties to displace SIMD after that valuable work by SIMD was completed,” the company wrote in its lawsuit filed in New York state court.
A spokesperson for Kinder Morgan noted that SIMD has filed a lawsuit regarding the matter in Texas, and said that’s where the case should be resolved. The spokesperson said the dispute arose from SIMD’s “disappointment that it was not the successful bidder to purchase property.”
A representative for SIMD could not be immediately reached for comment.
SIMD’s expertise is in coming up with remediation plans and working with environmental officials to clean up sensitive sites for development — after which time it sells the properties off to a vertical developer.
In the case of the Port Mobil site, SIMD said it signed a letter of intent in May 2019 to sell the massive site to warehouse builder Bridge Development Partners for $256.5 million, plus another $65 million for infrastructure work. The site could be developed into 2.6 million square feet of commercial space.
But SIMD claimed that as it was working with officials to come up with an environmental plan, Kinder Morgan started marketing the property for sale to others. Those companies included real estate developers NorthPoint and Industrial Development Advantage. SIMD alleges those companies had unfairly obtained access to its secret sauce for remediating sites.
NorthPoint had gained access to SIMD’s proprietary information in 2015, according to the lawsuit, when it proposed a joint venture to develop Staten Island’s former NASCAR site into an e-commerce campus. SIMD had prepared 676 acres of wetlands on the site for millions of square feet of commercial development.
The proposal never materialized into a joint venture. SIMD eventually went through with its plan, and sold the site in 2016 to developer Matrix Development Group, which signed Amazon and Ikea to spaces for large distribution centers.
SIMD claimed that in August, NorthPoint teamed up with Industrial Development Advantage, which had hired away a handful of key SIMD executives, with the purpose of ousting the company from the deal.
SIMD argued that in December, company executives finalized their agreement to purchase the site in a series of emails with their counterparts at Kinder Morgan – effectively forming a contract. But the company claimed that in March Kinder negotiated to sell the site to NorthPoint, based in part on its access to SIMD’s proprietary info.
SIMD is asking the court to award it unspecified damages, and to force Kinder Morgan to complete the sale.
Contact Rich Bockmann at rb@therealdeal.com or 908-415-5229.