Cape Advisors Buying Disputed Astoria Development Lot For $85M
Criterion Group is trying to sell a development site in Astoria, but its debt broker and one of its lenders are suing it for not following through on its original construction plans.
Bassuk Organization and Greystone EB-5 are suing Shibber Khan’s Criterion, arguing that the developer reneged on almost $230M in construction financing that the brokers had arranged, The Real Deal reports. Criterion is under contract to sell the site to Cape Advisors for $85M, according to the suit.
Bassuk secured a $215M loan from Mack Real Estate Credit Strategies, according to the lawsuit, for Criterion to build 711 residential units on the full-block waterfront site at 30-77 Vernon Blvd. Greystone’s EB-5 division also locked down $14M in funds, they claim.
Bassuk and Greystone allege that, while they were securing the financing, Khan was actively shopping the site. They further allege that entrepreneur David Lubinitsky, an investor in the project, was quietly working alone to market the site.
Greystone EB-5 said Cape Advisors Managing Partner David Kronman called the firm in November and said the company “was evaluating a potential acquisition of the project site and that Khan had authorized him to contact Greystone EB-5.”
Khan told the firm, however, he was not marketing the lot. The brokers want a $5.5M breakup fee, saying the commitment from Mack ran out at the end of 2017.