Chetrit and Stern go toe-to-toe on Downtown Brooklyn supertall

Chetrit alleged in suit former partner owes $17M for 9 DeKalb Avenue stake

New York /
Feb.February 25, 2022 09:45 AM

From left: Michael Stern and Joseph Chetrit in front of 9 DeKalb Avenue in Brooklyn (Getty Images, JDS Development, LoopNet/Photo Illustration by Steven Dilakian for The Real Deal)

Joseph Chetrit took aim at Michael Stern — and tens of millions of dollars — in a lawsuit over a Downtown Brooklyn supertall development.

Chetrit is alleging he is owed more than $17 million from a stake sale at 9 DeKalb Avenue, according to a lawsuit reported by Crain’s. The amount owed is allegedly rising by the day, but Stern’s JDS Development Group disputes the suit’s allegations.

Chetrit and Stern began the Brooklyn Tower project as partners, buying the property together in 2015 for $90 million. According to the lawsuit, Stern bought Chetrit out from his stake in 2018, partially paid for by a $20 million promissory note.

The suit alleges the deal closed in April 2019, when Chetrit received the promissory note, according to Crain’s. The suit said Stern guaranteed the note himself, due to mature in April 2020, in addition to $1.5 million owed if the note wasn’t paid off by the April deadline.

The deadline came and passed, according to the suit, and the payment ballooned to about $24.4 million before Stern issued a $10 million payment on Jan. 5, 2021. From there, however, about $8,000 in interest was accruing on a daily basis and continues to do so; according to the suit, Stern owed about $17.6 million as of Feb. 21.

Chetrit is seeking a summary judgment for the outstanding payment, Crain’s reported.

The 1,066-foot-tall tower is set to become Brooklyn’s tallest skyscraper upon completion. The property is planned to include 400 rental apartments and 150 condo units, as well as 120,000 square feet of retail space.

JDS secured a $664 million construction loan in April 2019 from Silverstein Capital and Otera Capital for the project.

Stern’s development entities were the subject of a summons filed in November from minority investors of his Miami Beach condo project. The investors are seeking $10 million, claiming Stern had a “pattern and practice of duping investors.” JDS denied the claims.

Chetrit and SL Green Realty settled a dispute in 2020 over the failed $815 million deal for the Daily News building in Midtown East. The real estate investment trust dropped a lawsuit after the private resolution to the matter.

[Crain’s] — Holden Walter-Warner





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