UPDATED, Oct. 16 2020, 4:30 p.m.: Richard Ruben has accused business partner Jonathan Resnick of usurping control of a luxury mixed-use building the two own, in a lawsuit that claims the building has “fallen on hard times.”
In a lawsuit filed in Manhattan Supreme Court, attorneys representing Ruben, the CEO of Ruben Companies, accused Resnick, who leads Jack Resnick & Sons, of taking control of a joint $20 million bank account, censoring information and restricting Ruben’s access to the books and personnel at Symphony House, the residential portion of the pair’s building at 235 West 56th Street.
The 44-story building at the center of the dispute was developed by Resnick’s firm in 1986. It includes a 34-story luxury residential tower with 480 residential apartments, 250,000 square feet of office and retail space and a 146-car parking garage.
Disagreements between the two arose 18 months ago, according to the court papers, but the situation has grown more urgent with the added stress of Covid-19. The lawsuit alleges that the property is in big trouble, with a vacancy rate of 35 percent on the residential portion.
“Symphony House is in immediate need of significant capital investment and repositioning,” an affidavit from Ruben reads. Representatives for Ruben declined to comment on the lawsuit.
“The Resnick Organization has always acted in good faith and in accordance with all of its obligations under the parties’ agreements,” said a spokesperson for the Resnick Organization. “We are disappointed that with the passing of our Chairman, Burt Resnick, and indeed even while his health deteriorated, Ruben has been making opportunistic attempts — and has now taken this frivolous action — to steal the business, which has been highly profitable and accretive to both families.”
Ruben’s lawsuit seeks to block Resnick from making unilateral decisions for the property, and would force the latter to open up the books to the former. The concealment of the property’s financial records, the lawsuit alleges, has Ruben concerned that Resnick is trying “to conceal deeper conflicts of interest or something else about their management — and possible financial or operational mismanagement — of the Property.”
The lawsuit also alleges that Resnick has excluded Ruben from making long-term decisions about the property, including how to bring down the current vacancy rate.
Ruben said that rather than do the “hard work” of re-leasing space in the building, Resnick, whose firm is also the property’s managing agent, recommended allowing corporate tenants stay without paying rent.
After Ruben toured the property in July, he determined the building needed a “top to bottom review of the entire tenant experience” in order to succeed in New York’s “hypercompetitive” residential market market.
Resnick resisted that recommendation, according to the lawsuit, and later hired a residential leasing and sales consultant against Ruben’s wishes, and excluded his partner from meetings with the consultant.
The Ruben and Resnick partnership was formed 40 years ago, when Arthur Belfer, Ruben’s grandfather, and Jack Resnick, Jonathan’s grandfather, planned real estate deals from the steam room of their jointly owned Sun and Surf apartments in Palm Beach.
Burt Resnick, Jonathan Resnick’s father, died in December 2019, and Richard and Jonathan “do not share the same level of collegiality” as their grandfathers did.
The partnership owns five Manhattan properties in addition to Symphony House: 110 East 59th Street, 880 3rd Avenue, 485 Madison Avenue, 161 William Street and 52 Broadway.
UPDATE: This story has been updated to add a comment from the Resnick Organization.