Gary Barnett hunts lucrative Hell’s Kitchen assemblage

Extell and Eli Tabak’s Bluestone playing hardball with owner of 11th Avenue site

New York /
May.May 05, 2022 08:00 AM
Extell Development's Gary Barnett. Bluestone Group's Eli Tabak and 605 West 45th Street (Google Maps. LinkedIn, Extell Development)

Extell Development’s Gary Barnett. Bluestone Group’s Eli Tabak and 605 West 45th Street (Google Maps, LinkedIn, Extell Development)

Gary Barnett’s Extell Development is working with Eli Tabak’s Bluestone Group to gain control of a large development assemblage in Hell’s Kitchen, court records show.

A limited liability company affiliated with Extell and Bluestone seeks to acquire a property integral to the assemblage, according to a lawsuit filed Monday.

Standing in their way is Robert Gans, who owns or leases the 60,000 square feet they covet west of 11th Avenue between West 45th and West 46th streets, including a Metropolitan Lumber & Hardware location.

The developers have a path to foreclose on the property that Gans owns: They have bought the loan collateralized by it. But acquiring the smaller parcel that Gans rents, a parking lot at 605 West 45th Street, will require a different strategy. It involves a lawsuit.

Gans, perhaps best known for owning the Scores nightclub in Chelsea that inspired the 2019 film “Hustlers,” appears to have an option to purchase — for $4.5 million — the 2,500-square-foot parking lot.

The Extell and Bluestone affiliate is suing him for not exercising that option. The lawsuit argues that the parcel was always meant to become collateral for Gans’ loan.

That is nonsense, according to Gans.

“This lawsuit is frivolous,” said an attorney representing him. “Mr. Gans and his companies have complied with their obligations regarding the lease purchase option, and the allegations in the complaint are simply wrong.”

If so, Gans is positioned to extract a king’s ransom for the lot. Already, the affiliate of Barnett’s Extell and Tabak’s Bluestone has offered him a $4.5 million interest-free loan so he can buy it.

But at the same time, Barnett and Tabak have leverage over Gans, as they are taking steps to foreclose on his loan, which they bought in April for $148 million.

The debt is secured by Gans’ real estate in Hell’s Kitchen as well as properties he owns in Chelsea and Queens. Gans’ former lender Mack Real Estate Group began foreclosure proceedings against him in October of last year over a $130 million loan. Mack served Gans with a default notice in April 2020.

Foreclosing on the rented parcel would save Extell the trouble of negotiating with its owner, Shalom Azani. But Gans is not merely playing defense: He is looking for his own partner to upzone and redevelop his adjacent lumber yard at 616 11th Avenue, and he sued Bluestone Group last month.

Gans’ lawsuit alleges a “sweeping and predatory scheme” by companies controlled by the Tabak family to gain control of his portfolio, including the Hell’s Kitchen assemblage.

Refinancing with another lender could save Gans’ properties from foreclosure, but his suit claims that Bluestone muddied the financial waters surrounding his assets to make it hard for him to do that. He seeks $100 million in damages.

Besides the Hell’s Kitchen assemblage, Gans owns a parcel across the avenue with 150,000 square feet of development potential, as well as the Scores building on West 28th Street, a retail property in Soho and 32,000 square feet of industrial property in Queens.

Representatives of Extell did not return requests for comment.





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