809 Broadway Developers Accuse Ben Shaoul Of Extortion And Impeding Development
Want to get a jump start on upcoming deals? Meet the major New York City players at one of our upcoming events!
The developers behind 809 Broadway (above, left) are bringing real estate magnate Ben Shaoul to court for a breach of agreement.
809 Broadway LLC, an Ariel Rom-led investment group, say Shaoul, who owns 813 Broadway (right), impeded development and extorted it for additional fees, the Commercial Observer reports.
The parties’ relationship was detailed in a 13-page petition filed to the New York Supreme Court. It started last fall, when the LLC sought permission to build a 15-story condo tower. Shaoul’s permission was needed to start work and and erect scaffolding, and he allegedly demanded $250k for his blessing.
In March, the developers were ordered to demolish a wall damaged by an accidental concrete spill. Since the work required a construction crane over 813 Broadway, Shaoul’s approval was again required, and he allegedly refused to grant an amended license until he received $20k per month. The concrete incident alone cost the investor group $3.5M, only $350k of which has been reimbursed, the lawsuit claims.
Shaoul supposedly stalled the project again when assessing damage to his roof, and then offered to buy the property for much less than the $50M the group had invested up to that point, the LLC claims. He even bet the developers $1M that he could continue to stall development for a year, even if that meant breaking 813 Broadway’s roof.
809 Broadway’s owner claims the building is now falling apart, structurally and financially, as the LLC’s in danger of defaulting on a $30M, Natixis Real Estate Capital-provided construction loan. The group’s attorneys are seeking a return of the monthly license fees and the initial $250k. [CO]