Spec Office Building in Midwood, Brooklyn, Heads to Court

A developer has turned litigator with his big Midwood project foundering.

Construction delays and funding problems have thrown a speculative office and yeshiva project in Brooklyn, developed by Baruch Singer and financed by Parkview Financial, to the courts.

A Singer affiliate sued Parkview on Friday over construction debt at 1508 Coney Island Avenue, a stalled 10-story project slated to have 215,000 square feet of retail and office space.

The lawsuit is the result of “long-running problems” with Parkview’s funding of the construction loan, said Singer’s attorney, David Abramovitz of law firm Leech Tishman.

“As a last resort, we were compelled to initiate litigation against Parkview which repeatedly breached its obligations to our client [and] endangered this great project,” Abramovitz said.

Delays to the project threaten the plans of its anchor tenant, a yeshiva that agreed to lease a third of the building but will not be able to start classes at the property as planned this fall. The situation has rattled parents in the wealthy Syrian Jewish community who were expecting their children to attend, said a source close to the developer.

Parkview CEO Paul Rahimian denied any wrongdoing and accused Singer’s company of bungling the project.

“We put the loan into default after interest payments were missed,” Rahimian told The Real Deal. “We kept our end of the bargain. Cost overruns at the project have caused delays.”

Los Angeles-based Parkview funded construction of the building with $92 million in May 2022, replacing prior debt and providing new financing to finish the project.

The development, located between Avenues K and L, will have 51,000 square feet of multilevel retail and 112,000 square feet of office space.

The property was meant to be completed in October 2023, according to Parkview’s website, well in time for the yeshiva tenant to open its doors in the fall of 2024. But the building is still undergoing interior construction after topping out last summer.

Parkview has financed numerous projects in major markets across the U.S. Most of the loans listed on its website are for tens of millions of dollars, but a few are larger.

Shortly after funding Singer’s project, Parkview rescued an office project in the West Village with $70 million in construction financing, and funded the conversion of the Hudson Hotel in Midtown, although its debt was later purchased by Northwind Group.

Singer has navigated years of legal trouble since becoming persona non grata to city and federal housing authorities, which accused him of jeopardizing tenants in Harlem.

As residential development pushes further into the outer boroughs, and as fewer workers commute to central business districts, neighborhood office buildings represent an opportunity — if their developers can finish construction.