Durst deadlocked with owners of prime LIC site

Owners of “Lake Vernon” haven’t paid their property taxes or fines for years

L&L MAG CEO MaryAnne Gilmartin, 44-02 Vernon Boulevard in Long Island City and Douglas Durst (Credit: Google Maps)
L&L MAG CEO MaryAnne Gilmartin, 44-02 Vernon Boulevard in Long Island City and Douglas Durst (Credit: Google Maps)

A Long Island City development site next to Amazon’s abandoned headquarters location — mockingly called “Lake Vernon” for its large puddles — has racked up thousands of dollars in fines for being a mosquito breeding ground.

But it’s not the owners paying the bills at 44-02 Vernon Boulevard.

Rather, it’s the Durst Organization, which holds the debt on the property and has been trying to foreclose on it for more than a decade. The developer has also been protecting the valuable six-acre site by paying its property taxes and satisfying mechanic’s liens, court documents show.

The tab for protecting the land has climbed to $10.5 million so far.

“The current owners are unable or unwilling to pay the property taxes and maintain the site,” said Durst’s Jordan Barowitz.

Now, as the city moves forward with plans to rezone the area for multifamily housing, Durst and the owners — a group headed by Rudy Giuliani’s former confidante and chief of staff Bruce Teitelbaum — are deadlocked over how much the group owes.

A referee in the foreclosure case this summer put the amount at $69.35 million. Durst, however, deemed that too low and filed an objection.

Teitelbaum said that he and his group will cut a check when the referee’s decision is confirmed.

“For years, we have tried to pay the mortgagee, which has resisted by misstating the true amount owed,” he said, alluding to Durst. “Now, a court-appointed referee has issued a ruling which we are fully prepared to satisfy as soon as possible.”

Teitelbaum and his investors brought on MaryAnne Gilmartin’s L&L MAG earlier this year as a development partner for the site. They are talking to the de Blasio administration about its potential inclusion in a larger rezoning. Amazon withdrew its plans for the area in February.

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But there’s another complication: It’s not clear who owns the property. Durst acquired the non-performing debt in 2009 when the site was owned by investor Marshall Weissman, who lists the same business address as a kosher deli some 75 miles away in the Orthodox Jewish community of Lakewood, New Jersey.

Weissman told TRD that he no longer has an ownership stake in the property. Meanwhile, he’s still pursuing his 2006 lawsuit against investor Baruch Singer, who Weissman claims backed out of a 2005 contract to buy the property for $193 million.

Singer is listed as a party of interest in Durst’s foreclosure case, along with the ownership group Teitelbaum represents. Singer’s lawyer happens to be Michael Reich, one of three attorneys who run the politically influential Queens Democratic Party.

A spokesperson for the City Council said the foreclosure case won’t have any bearing on the rezoning, which requires the legislative body’s approval.

“The Council makes its land-use determinations based on the needs within each community and citywide policy consideration, not based on ownership,” the spokesperson said.

Teitelbaum and his investors insist it’s just a matter of time until they pay off the defaulted mortgage.

Their attorney, Jay Neveloff of Kramer Levin Naftalis & Frankel, said that under the state’s equity of redemption right, Durst can’t wrest control of the site from the owners as long as they pay the money owed.

“There’s no doubt in my mind that we can get financing once we get a rational payoff number,” he said.

Neveloff called the dispute a case of Durst playing hardball to get more negotiating power.

“This is just Durst being Durst,” he said.