DDG sues Tribeca Townhomes over alleged construction delays

At issue is a $1.1 million agreement granting the developer access

12 Warren Street, DDG's Joe McMillan
12 Warren Street, DDG's Joe McMillan

Developer DDG has run into a problem building its 12-story residential project at 12-14 Warren Street. The condominium board and sponsor of the Tribeca Townhomes next door have failed to give the developer access to the building as promised, according to a new lawsuit.

DDG said that it had previously acquired the air rights from Tribeca Townhomes, developed by A2 Investment Group at 16 Warren Street, enabling it to build on the adjacent lot.

But now, Tribeca Townhomes has declined to honor a $1.1 million agreement to let DDG’s contractors erect scaffolding and put up other protection equipment at the property, the developer claims in a suit filed Dec. 24 in New York State Supreme Court. Without access, construction will stall out — and further delay could lead to a loan default, the suit alleges.

A2 co-founder Joel Assouline told The Real Deal that he was not aware of the suit and therefore declined to comment. Lawyers for DDG declined to comment, while lawyers for Tribeca Townhomes were not immediately available.

DDG said in court papers that it had all the required Department of Buildings permits, and had already started demolishing an existing building at 12-16 Warren Street. DDG filed plans with the New York Attorney General’s office in November to build a 13-unit condo project called 12 Warren Street. The new development will have duplex, half-floor and full-floor units, with a private landscaped roof lounge, laundry, and private landscaped terraces and will be done by 2015, according to the company’s website.

DDG was in talks to access the site for more than a year, but at the eleventh hour, Tribeca Townhomes refused to grant the required license without “any conceivable reason or justification,” attorney John Simoni, who represents DDG, said in court filings.

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However, a lawyer for the Tribeca Townhomes sent him an email indicating his clients had concerns about the impact of construction on a remaining unsold penthouse, he added.

A 3,380-square-foot, three-bedroom penthouse was listed in August for almost $6 million, StreetEasy shows. That would be the last of six units to sell.

DDG, led by Joe McMillan, has a number of development projects underway or recently opened, including an eight story mixed-use building at 100 Franklin Street in Tribeca.

They also agreed in October to buy a 130,000-square-foot development site at 1558-1560 Third Avenue from Muss Development for $70 million.