Juicy lawsuits to watch as courts “virtually” reopen
Fights over projects, rezonings and retail space can resume next week
New York’s famously litigious real estate industry can restart its engines as soon as next week, when state judges will begin reopening their courtrooms for nonessential actions using video hearings or teleconferencing.
That’s good news for litigants in the many real estate cases put on hold by the coronavirus pandemic — particularly developers whose projects hang in the balance.
Here are 11 lawsuits that the industry will keep an eye on as the legal system creaks back into gear:
1. Inwood rezoning: New York Supreme Court Justice Verna Saunders shocked even opponents of the northern Manhattan rezoning when she overturned it in December, ruling that the city did not adequately consider its possible socioeconomic impacts. The city appealed her decision, and developers Maddd Equities and Taconic Partners — which had major projects planned in the neighborhood — filed an amicus brief in March to support reinstating the rezoning. The de Blasio administration has struggled to advance several rezonings in recent years, and the Appellate Division could help it get back on track — and facilitate future rezonings — by reinstating its Inwood plan.
2. Two Bridges: Four towers planned in Manhattan’s Two Bridges neighborhood have been tied up by multiple lawsuits. Supreme Court Justice Arthur Engoron ruled against their would-be developers last summer and again in February, agreeing with local opponents that the administration should not have exempted the projects from the city’s public review process. JDS Development, L+M Development, CIM Group and Starrett Corporation would build the towers at 247 Cherry Street, 260 South Street and 259 Clinton Street. The combined 2,775 apartments would more than triple the neighborhood’s count of residential units. A third lawsuit against the projects is pending. The city is appealing Engoron’s decision from last summer.
3. Toby Moskovits vs. creditors: The developer and her partner Michael Lichtenstein have been hit with a bevy of lawsuits from creditors in recent months, and have fought back with lawsuits of their own. Properties at stake in the legal battles include the Bushwick Generator, the Williamsburg Hotel and 564 St. John’s Place in Crown Heights. The cases could determine whether Moskovits and Lichtenstein can maintain control of their properties — and their futures as developers in the city.
4. 200 Amsterdam: A state judge in February took a dim view of the 39-sided zoning lot that developers SJP Properties and Mitsui Fudosan America put together to construct a 668-foot condo building at 200 Amsterdam Avenue, revoking a permit for the Upper West Side project. The city’s Law Department and the developers appealed the ruling in March, even though the Department of Buildings has said it will not allow assemblages of partial zoning lots again. The developers could have to remove 20 of the tower’s 52 stories if the judge’s ruling is not overturned.
5. Prada vs. Jeff Sutton: Prada sued Sutton on Christmas Eve to hold its billionaire landlord to a suspension notice that would allow him to renovate its location at 724 Fifth Avenue while the luxury fashion company vacated temporarily and received $5 million from the property owner. The suit claimed that Sutton could issue only one suspension notice and not revoke it. A judge last month disagreed on the first claim — allowing Sutton to recover some of his legal costs from Prada — but agreed with the retailer that the suspension notice was irrevocable. Two weeks later, all civil cases were postponed.
6. Greek Condo crisis: Buyers of three $11 million condos at 40 East 72nd Street are suing the condo sponsors: shipping magnate Spiros Milonas and his wife Antonia. The buyers claim that the couple has failed to pay common charges on the other units or to properly manage the property. This has left the building without enough money for maintenance and operations, the lawsuit says.
7. Compass vs. Realogy: Realogy sued Compass in July, accusing the brokerage of predatory poaching and illicit business practices and its CEO Robert Reffkin of price-fixing attempts. Compass has characterized the lawsuit as a desperate act, and the sides have accused each other of withholding witnesses or information. When the pandemic struck, the firms were fighting over whether to enter arbitration.
8. Hotel developer fights City Hall: ELK Investors’ Morris Kalimian filed a petition in February that would block the city’s plan to require special permits for hotel construction in an area south of Union Square without determining the impact of its larger effort to require special permits for hotel projects citywide. The petition claims that Mayor Bill de Blasio’s administration is avoiding assessing the citywide impact by introducing special permits one neighborhood at a time, which violates state law. Prolific hotel architect Gene Kaufman has spoken out in support of Kalimian’s petition.
9. Unwanted Guesty: The mayor’s Office of Special Enforcement announced in early March that it had opened an investigation into the Israeli startup Guesty and subpoenaed records of its activities in the city. Officials believe the startup played an important role in the operations of Metropolitan Property Group, a brokerage firm accused of running an illegal network of Airbnb rentals across 35 Manhattan buildings.
10. Property tax discrimination: Industry-backed group Tax Equity Now New York filed a lawsuit in 2018 claiming the city’s property tax system discriminated against minorities by undertaxing homes in wealthy neighborhoods relative to theirs. The Appellate Division threw out the lawsuit in February, determining that disparities between the properties were not arbitrary. Tax Equity Now plans to take the case to the Court of Appeals, New York’s highest court.
11. BBQ controversy: The megachurch Brooklyn Tabernacle is suing Dallas BBQ and Thor Equities for upwards of $10 million over alleged damage to its condo unit at 180 Livingston Street caused by liquids coming from the restaurant. The church wanted to build a chapel, computer lab and space for community classes at 180 Livingston Street, but the leaks from Dallas BBQ ruined this plan, the church claims. A source close to Thor said the dispute is really between the church and the eatery, with the landlord stuck in the middle.