Former Massey Knakal Brooklyn head sues
Timothy King, a one-time chief operating officer and partner at Massey Knakal Realty, will square off with his former employer in Brooklyn Supreme Court on October 1.
King, a 30-year real estate veteran and former head of Massey Knakal Realty of Brooklyn, alleges in a $3 million lawsuit that when he tried to acquire accurate and audited financial statements, books and company records to determine the value of the company, the defendants — the firm and founders Paul Massey and Robert Knakal — “stonewalled” him.
The suit alleges the company wanted “to hide the defendants’ self-dealing, waste, breach of fiduciary duty and misappropriation of company assets.”
King alleges in the suit that the company violated the Real Property Law and the New York Penal Law by paying “commissions, as referrals, to unlicensed people,” including attorneys, “with the intent to have the attorneys influence the choice of the company as the customers’ real estate broker.”
The judge ordered Massey Knakal of Brooklyn, a limited liability company under investment sales parent company Massey Knakal Realty Services, to prepare audited financial reports and balance sheets from 2002 to the present for a recent court appearance, which was adjourned until October.
The suit alleges that Massey Knakal “failed to provide audited financial statements for 2002 through 2007 as required in the company’s operating agreement which was authored by the defendants.” King hopes to win $3 million “on behalf of Massey Knakal Realty of Brooklyn,” which has six shareholders including King.
When asked to comment on the lawsuit, Massey Knakal CEO Paul Massey said, “Ending a partnership is never easy. We wish Tim well in establishing his leasing business in Brooklyn.”
King joined the firm in 2002 to run the new Brooklyn operation and, according to the amended complaint, he was given 10 percent ownership of the company plus income from 10 percent of its profits. The office began earning money in 2003, and within four years it had sold more than $1 billion in Brooklyn properties, according to King’s bio.
After holding the position as managing partner of the Brooklyn office, King was appointed Massey Knakal’s first COO. He left the company in March.
He charges that the only financial records the firm would give him were “woefully inadequate to explain the transfer of funds from the company to affiliates or the details of the loans themselves.”
The suit also alleges that by not “informing [the buyer and seller] of the dual agency or obtaining the written acknowledgement,” the firm violated a rule against dual agency issued by the New York State Department of State, which grants and oversees real estate licenses. By Lauren Elkies
Corcoran Group takes over marketing on Chelsea project
The Corcoran Group has taken over the marketing and sales of a Chelsea conversion project from marketer Michael Shvo.
Corcoran’s Julie Pham, vice president and associate broker, and Joseph Bongiovanni, a salesman, are now the co-sales directors at 650 Sixth Avenue.
The 67-unit, seven-story landmark building at the corner of 20th Street is being developed by Penterium, the residential development arm of Korean firm Kumkang Housing Corp. This is the developer’s first project in the United States.
On Shvo’s watch, the building was 35 percent sold. When Shvo started marketing 650 Sixth Avenue in June 2007, he referenced the nearby Chelsea art scene and promoted the apartments as blank canvases. Shvo partnered with the Jack Shainman Gallery, and the gallery in the sales office and in a point-click-and-drag feature on the building’s Web site.
Shvo also got the building placed on the Soap Net show “The Fashionista Diaries” last year.
When asked why Shvo is no longer marketing the project, the company e-mailed a statement: “Shvo played an integral role in shaping the concept of 650 Sixth Avenue and bringing it to life. After a successful collaboration, Shvo is focusing on its other projects as its local and international property portfolio rapidly expands in North America, Africa, Asia [and] the Middle East.” By Lauren Elkies
Ritz-Carlton developer sells condo for $28M
The developer of the Midtown New York Ritz-Carlton sold his upper-floor apartment at the hotel-condo building for $28.5 million, about $5.5 million less than its listing price.
Christopher Jeffries, a founding partner of Millenium Partners, sold unit 29, a 5,954-square-foot apartment at 50 Central Park South between Fifth and Sixth avenues, to an unidentified buyer. The four-bedroom unit was listed for $33.9 million on the Web site of brokerage Hall and McNaughton.
Jeffries and his partners built the Lincoln Square complex adjacent to Lincoln Center, and later bought 50 Central Park South, known then as the St. Moritz Hotel, from Ian Schrager’s hotel company in 1999. It was rehabilitated and opened as the Ritz-Carlton New York in 2002, with luxury condominiums on the upper floors.
By Adam Pincus
Gianfranco Ferre sells UES lease to Dior
The Italian fashion house Gianfranco Ferre sold the lease to its shuttered flagship store at 870 Madison Avenue for $3 million to fashion house Christian Dior.
The 3,000-square-foot location at East 71st Street opened in 2004 and closed at the end of July.
Gianfranco Ferre, who died in June 2007, worked for Christian Dior as stylistic director from 1989 until 1997.
At the time of the store’s closing, the company said the move was not related to sales, which grew by 17.6 percent in 2007. It said the store closed so that a new store could open with a repositioned line at another location. A new location has not yet been selected, an official with the company said.
In June, Gianfranco Ferre’s company made a signing a multi-billion-dollar joint venture agreement with developer GIO Developements to develop “couture architecture” worldwide, with the first project slated for Dubai. By Adam Pincus
Shvo employee starts brokerage
Tali Geva, who worked for Michael Shvo at his marketing firm Shvo, has started her own brokerage firm, Avenue.
Geva, whose office is at 666 Broadway near Washington Square Park, was in marketing at Shvo and left the company in December. She then decided she wanted to start a straight brokerage company. Shvo’s sales force works only on-site.
Avenue has re-sale listings at Shvo-marketed buildings, including 20 Pine.
“The company right now is focusing on re-sales as there is a need for it,” Geva said.
The other managers at Avenue are Ariel Levy, who Geva said is a family member, and Shari Markoff, who had been a broker for Shvo. Avenue agent Jamie Goldgrub was also a Shvo broker. By Lauren Elkies
McSam settles claim at stalled Bronx hotel
McSam Hotel Group said it has settled a damage claim related to a Comfort Inn project that had drawn complaints from the community in the Norwood section of the Bronx. But construction delays continue due to an unresolved stop-work order.
The Department of Buildings placed a stop-work order on the property at 3070 Webster Avenue last October. The action was related to construction work that the DOB says was done without proper permits. The agency also states that an adjacent home was damaged.
A concrete wall was built without a permit, DOB records show, and McSam has since paid a $500 fine. But the department says on its Web site that the project still has not been fully brought into compliance.
Gary Wisinski, chief operating officer of McSam Hotels, said the company has recently settled claims by the nearby homeowner for an undisclosed amount, and that McSam’s architectural firm was working to resolve the remaining issues surrounding the delay.
“It’s in the hands of the Department of Buildings,” Wisinski said.
The homeowners, Virginia Hakemian and her brother Harold, said that construction at the Comfort Inn site caused flooding in their basement and major water damage. By David Jones
UWS building sold for $83 million
A 91-unit apartment building on the Upper West Side at 845 West End Avenue and 101st Street sold for $83 million. The buyer of the 15-story building was identified as an affiliate of the real estate investment firm Atlas Capital Group, founded in 2006 by former UBS managing directors Jeffrey Goldberger and Andrew Cohen.
The 1930 doorman building had two- and three-bedrooms renting for between $7,800 and $10,250 over the past year, according to StreetEasy.com.
The buyer also took out a $60 million mortgage on the building. By Adam Pincus
Brooklyn developer to face bank in condo default case
Brooklyn developer Moshe Feller is scheduled to face off in court against Corus Bank, which filed suit against his Karl Fischer-designed Kensington condominium development about two months after contractors walked off the job.
Corus filed suit in June against Caton on the Park, a 107-unit condo building that has sat idle since April 4, when the New York City Department of Buildings issued a stop-work order.
Corus loaned Feller $32.8 million in 2006 to develop the condominium at 23 Caton Place. Feller acquired the site, formerly owned by Kensington Stables, for $6.25 million in 2005. By David Jones
Arthur Zeckendorf pays $10M at 15 CPW
One of the developers of 15 Central Park West, Arthur Zeckendorf, purchased a 4,589-square-foot apartment in the trophy complex for $10.5 million.
The tenth-floor unit has four bedrooms and views facing east, north and west.
The developer got a better deal than tool retailer Robert Glickman, chief executive officer of Harbor Freight Tools, who paid $19.5 million for an apartment about the same size — 4,563 square feet — on the same floor.
Zeckendorf developed 15 CPW with his brother William, who also reportedly bought a unit in the building.
By Adam Pincus
Buyer files suit against 20 Pine Street, claims sales were inflated
Developer Shaya Boymelgreen and marketer Michael Shvo are facing a lawsuit from a Brooklyn-based buyer that alleges they exaggerated sales figures and completion dates at 20 Pine, the Collection, and then refused to rescind a contract to buy 10 apartments.
The suit, filed by 20 Pine Realty in New York State Supreme Court, alleges that 20 Pine Realty entered an agreement to buy 10 condo units at 20 Pine Street in January 2006 and deposited $819,500 to hold the apartments.
Twenty Pine Realty lists its location at 519 Flushing Avenue in Brooklyn. The New York Secretary of State’s records do not list any principals at the firm, which organized as a limited liability corporation in January 2006.
The plaintiff’s lawyer, Yoram Nachimovsky, could not be reached for comment.
The suit claims that the plaintiff tried to walk away from 20 Pine Street during the initial seven-day rescission period, but was turned down and was told the building would still be completed on schedule.
The suit alleges that Boymelgreen told the plaintiff that hard contracts had been signed for 140 of 409 apartments, that nearly all the purchasers were planning on living in the building, and that the entire building would be ready for occupancy by January 2007.
The plaintiff claims that by the end of 2007, it attempted to contact Shvo and the developer regarding the status of 20 Pine Street, but was ignored.
The plaintiff claims that he suffered more than $2 million in losses due to delays.
Twenty Pine has been one of the highest-profile condo developments in Lower Manhattan since Boymelgreen teamed up with Armani/Casa in 2006 to convert the former Chase Manhattan headquarters into luxury condominiums. By David Jones
French handbag retailer buys on Madison Avenue for $48M
Fashion bag maker Longchamp bought the building housing one of its two Manhattan retail stores on the Upper East Side for $48 million.
The Paris-based retailer and manufacturer of fashionable bags, clothes and accessories bought the five-story townhouse at 713 Madison Avenue from heirs to the Mailman family. The Mailmans have given millions of dollars to Columbia University’s School of Public Health.
The sellers were Jody Mailman Wolfe and another company affiliated with the family. Wolfe and the other company still own the neighboring townhouse at 715 Madison Avenue, which houses a ground-floor retail store for Moga Apparel, which sells French and Italian women’s clothes. By Adam Pincus
Barbara Corcoran pays $4M for UES condo
Barbara Corcoran, the founder of the Corcoran Group, and her husband bought the upper-floor condo in a converted townhouse on the Upper East Side for $4 million.
Corcoran and her husband William Higgins bought the unit at 163 East 71st Street in Lenox Hill from the building’s owner, Joseph Frantin. The couple has an apartment at 1192 Park Avenue and 94th Street.
The four-bedroom 71st Street unit occupies the second through fifth floors, with a total of 2,710 square feet, and also includes a hardwood roof deck. The apartment is advertised for $20,000 per month on the Web site of Corcoran’s old firm.
The building, named the Ataraxia, was converted from a single-family home to a two-unit condominium earlier this year. By Adam Pincus
Developer Chang sells hotel site near Times Square for $59M
Hotel developer Sam Chang sold a Times Square-area parcel in the early stages of construction for $59 million, far above the $13.48 million the developer paid for the site in 2006.
The Rhode Island hotel development company Magna Hospitality Group bought the 74,000-square-foot site at was at least the fifth hotel site Chang has sold to Magna since February.
The price difference was not all profit, however. Chang added value to the property through a zoning lot merger, a payment to the city for a bonus in development rights and approved plans for a 39-story hotel, city records show.
In June 2007, Chang merged the zoning of the lot on 39th Street with a neighboring parcel at 308 West 40th Street that was owned by a partnership partially controlled by McSam, which gave Chang an unspecified increase in development rights.
Also in June last year, Chang paid $6.3 million to the Hudson Yards District Improvement Fund, which allowed him to increase the building’s floor-area ratio from 10 to 18, netting the site 59,250 more square feet, city records showed.
The Department of Buildings’ Web site shows approved plans for the Gene Kaufman-designed hotel, one of six Chang had initiated on West 39th Street.
By Adam Pincus