Normandy sued by former partners for hiding Netflix deal

Investors allege Normandy negotiated in secret with Steel Equities, streaming giant

New York /
Jan.January 18, 2021 11:45 AM
333 Johnson Avenue with Royalton Capital’s Jin Lee, Sciame Construction's Frank Sciame and former Normandy partner Jeff Gronning (Royalton Capital, Sciame, Normandy)

333 Johnson Avenue with Royalton Capital’s Jin Lee, Sciame Construction’s Frank Sciame and former Normandy partner Jeff Gronning (Royalton Capital, Sciame, Normandy)

In a drama not quite worthy of a Netflix series but serious enough to trigger litigation, Normandy Real Estate Partners is being sued by its former investment partners for $106 million.

According to the lawsuit filed last month in Manhattan, Normandy — which was part of an investment partnership called 333 Johnson Property Holdings — sold the holdings’ property at 333 Johnson Avenue to Steel Equities for $52.5 million, without disclosing to other partners including Royalton Capital’s Jin Lee and Frank Sciame of Sciame Construction that Netflix was interested in leasing the entire property.

After the sale was completed in December 2018, the value of the 160,000-square-foot site at 333 and 339 Johnson Street shot up to $361 million, Crain’s reported. Gov. Andrew Cuomo’s office announced Netflix’s deal in Brooklyn in April 2019.

Normandy, which has since been bought by Columbia Property Trust, admitted in court papers that the company was aware of Netflix’s interest in leasing the space but claimed that Netflix didn’t want to lease it from the partnership because of its lack of experience in building sound stages.

The plaintiffs argue in court papers that Normandy negotiated with Netflix and Steel Equities behind the scenes. They allege that two principals of Normandy, as well as Princeton Holdings’ Joe Tabak and Robert Wolf of Read Properties, received undisclosed compensation from the deal.

Representatives for Normandy and Princeton did not respond to requests for comment from Crain’s. Steel Equities and Read Properties could not be reached for comment. [Crain’s] — Akiko Matsuda





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