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Flank buys Williamsburg development site amid legal dispute
Investor Shulem Herman filed two suits after entering contract last year
Despite ongoing litigation over a South Williamsburg development site next to the Domino Sugar Factory megaproject, Flank closed late last week on the purchase for $36.2 million, or more than $460 per buildable square foot, sources told The Real Deal.
Since October, investor Shulem Herman has filed two lawsuits in which he claims he was squeezed out of a deal to buy five contiguous tax lots with frontage on South 2nd Street,South 3rd Street and Wythe Avenue. Herman initially accused Bruce Terzano, a Long Island-based landlord who runs Glen Cove Arena Taxi, of canceling his contract to buy the parcels for $36 million. A New York State Supreme Court judge dismissed the complaint on Jan. 14.
Marcus & Millichap’s Shaun Riney
The following day, Herman returned with a new, expanded lawsuit in which he claims Terzano and tenant Brice Jones’ Jones Hospitality Group conspired to bring in a new buyer, Flank. Herman also claims Flank was “determined to own the property, even if it meant using deception and fraud.” That lawsuit is ongoing.
Nevertheless, the site now belongs to Flank, one of the most prolific condominium developers in Brooklyn. Sources told TRD that the firm is considering redeveloping the retail-heavy site as residential over the next five or six years, once the retail leases expire.
The deal closed slightly above its $35 million asking price. A Marcus & Millichap team led by Shaun Riney, Michael Salvatico and Jim Saros marketed the parcels.
Riney said he does not expect any more litigation now that deed has transferred.
The site offers nearly 80,000 buildable square feet and is home to several low-rise buildings leased to tenants such as trendy coffee shop and bar Freehold and patio bar Crown Victoria. The tenants’ leases expire between 2018 and 2023, according to marketing materials.
Lawyers for Herman and Terzano did not respond to a request for comment, while a representative for Flank declined to speak.