Long-troubled New York City REIT could face a proxy battle unless it acquiesces to a disgruntled activist shareholder’s request for an appointment of a new independent board member.

Israel-based Comrit Investments 1 LP has told the board it will face a “costly contested election” at the yearly shareholder meeting next year if it doesn't agree to the nomination of its choice of director, Sharon Stern, The Real Deal reports. Stern is a real estate and corporate governance expert, according to Comrit, and would be an independent member. She is currently on the board of retail REIT Cedar Realty Trust.

Comrit takes issue with New York City REIT CEO Michael Weil, who is also the CEO of AR Global Investments. Specifically, Comrit said it is concerned that in 2019 and 2020, the REIT paid close to $22M in management fees to entities owned and controlled by AR Global. In its letter, released Wednesday, Cormit wrote that it “prefers to collaborate in a constructive and private manner” with the companies it invests in, but that it “cannot sit idly by as the Board continues to allow NYC REIT’s balance sheet to erode.”

Comrit wrote that the REIT's stock price depreciated approximately 60% over the past 15 months, now sitting at a fraction of its net asset value while the company was paying out the funds to AR Global's affiliates.

“We question how a fully engaged and truly independent board could allow Mr. Weil to ink a generous advisory deal in favor of AR Global, which automatically renews for successive five-year terms and entitles the advisor to a more than $15M early termination fee, at the expense of the company’s stockholders,” Comrit wrote.

The REIT was previously known as American Realty Capital New York City REIT, and owns a portfolio of office and retail including 9 Times Square and 140 Avenue of the Americas, per Commercial Observer. It was founded by Nicholas Schorsch, who resigned after the company admitted to overstated revenues and understating losses, according to TRD.