After eviction, legal woes and agent exodus, Bellmarc left licking its wounds
TRD Friday Feature:
November 2012: Neil Binder’s Bellmarc Realty, one of Manhattan’s top residential sales brokerages, announced it was absorbing rental powerhouse AC Lawrence Real Estate. The hope was that the consolidated firm, known as the Bellmarc Group, would be a major player in both rentals and sales.
June 2013: Coldwell Banker entered into an agreement with Bellmarc to take another shot at New York City. The real estate franchise giant subsequently invested a big chunk of money into Bellmarc, and the number of agents ballooned to about 550.
Now: Binder has broken up with his AC Lawrence partners Anthony DeGrotta and Larry Friedman. Coldwell Banker has terminated its franchise agreement with Bellmarc and is suing Binder over unpaid franchise fees. In a matter of months, Bellmarc has lost at least 200 agents and, in the words of Binder, is “struggling.”
Despite the Bellmarc Group’s seemingly endless headaches, Neil Binder isn’t ready to walk away. In an exclusive interview with The Real Deal, he said he is looking for a new partner and is focused on rebuilding his brand.
“The events that took place had a serious adverse effect on the company,” Binder said, describing the split between the companies as “an earthquake.” But, he added, “I believe that there are a tremendous number of people in this company who believe in me, and I believe in them.”
Bellmarc has five offices left in New York. Mirador Real Estate now occupies its former Greenwich Village location at 16 East 12th Street. Its former Times Square office is also shuttered, in addition to the 56th Street and Lexington location that they were evicted from.
And, perhaps most significantly, it’s hemorrhaging sales agents, who were once the backbone of the brokerage.
“I’m mending,” Binder said. “Today I’m not Hercules. Maybe next year.”
Clash of cultures
When Bellmarc and AC Lawrence first merged, the plan was for them to maintain their separate identities and cultures, while pooling together their resources and management experience. The merger gave Bellmarc some much-needed clout in the rental market, while it allowed AC Lawrence the brand recognition and backing of one of the city’s most-respected residential firms.
Friedman and DeGrotta started AC Lawrence in 2005 after leaving now-defunct rental brokerage Manhattan Apartments. Initially, Binder had planned to hand over Bellmarc’s day-to-day operations to his two new partners. Entering his early 60s, Binder wanted to focus on writing books and blog posts as well as being the face of the company.
“They were going to run the shop,” Binder said. “The company had more than doubled in a year, we were doing very well.”
Trouble, however, started brewing rather swiftly due to a lack of trust on both sides. Rather than stepping back and letting DeGrotta and Friedman run the show as he had promised, Binder said he felt it necessary to stay involved in all decisions after he felt that the two men had an agenda of their own. He disagreed with AC Lawrence’s growth trajectory, thinking it too aggressive, and was worried that incoming rental brokers weren’t being adequately trained.
What followed was an “undercurrent of frustration,” Binder said. “I didn’t agree with their culture.”
Tensions boiled over in August, when DeGrotta and Friedman sued Binder for allegedly embezzling money from the firm and using it as his personal “piggy bank.”
DeGrotta and Friedman both declined to comment for this article.
The suit has since been settled. As part of the agreement, DeGrotta and Friedman relinquished interest in the company. The two also paid Binder $25,000 as part of the agreement. While Binder called it an “apology” payment, sources said the money allowed DeGrotta and Friedman to get out of their noncompete agreements. The two are now at Keller Williams.
Binder categorically denied all DeGrotta and Friedman’s allegations, and sent TRD an analysis he commissioned from an outside accountant.
“I do not believe there was any action on Mr. Binder’s part that was not in compliance with the operating agreement,” the accountant, Jeffrey Shapira, said in the analysis.
Coldwell pulls the plug
Binder’s legal battle with DeGrotta and Friedman is just one of many. Bellmarc is still knee-deep in a dispute with Coldwell Banker, which sued the firm for alleged nonpayment of franchise firms and moved to cut all ties.
“Coldwell Banker Real Estate has terminated its franchise agreement with the Bellmarc Group due to the brokerage’s continued failure to meet its contractual obligations,” said David Siroty, a spokesperson for Coldwell Banker. He declined to comment further.
Binder claims he only stopped paying the franchise fees because Coldwell Banker didn’t provide referrals and leads as promised.
“My beef with them is substantial,” he said, “and I’m going to bring them to court.”
In a letter sent about the lawsuit to Bellmarc employees in December, Binder wrote that “Bellmarc’s position is that these fees are not appropriate and are offset by far larger amounts owed by Coldwell Banker to Bellmarc.”
These troubles, unsurprisingly, have led agents to flee the firm en masse. One former Bellmarc broker claimed that Binder still owes him thousands of dollars, and said he wasn’t hopeful that he’d ever receive the money.
“(Binder) just laughs in your face,” he said. “With a guy like this, you can’t win.”
The broker also spoke of things getting ugly at the end of the AC Lawrence partnership, describing shouting matches, inappropriate behavior and fighting over the course of “two months of war.”
“It almost came to a fist fight,” he added.
Binder sees it differently. Saying that while there was “passionate speaking” involved, there were certainly no screaming matches. “I do have a tendency to speak loudly,” he said.
He admitted a few people are waiting on checks, but said they had broken their “fiduciary responsibility” to the company, allegedly bad mouthing Bellmarc to landlords.
And there are other woes. In February, Broadview Networks Inc. — Bellmarc’s former phone service provider — sued Bellmarc, alleging that the brokerage owes close to $1 million in unpaid cancellation fees, phone bills and other fines.
For now, Bellmarc is licking its wounds. But, Binder promised, he’s not going anywhere.
“I’ve had people telling me I’m going under for 35 years,” he said. He wants to resurrect the firm with the help of a new partner.
“I don’t like to run the shop alone,” he continued. “It’s lonely. I’m not that kind of guy.”