Philip DePaolo writes:
"Terminal Marketing" in Real Estate
Greenpoint, Brooklyn
Philip DePaolo
Today’s article in the The Real Deal really got me going. Let’s review the facts...
An ad on craigslist.com in March 2006 for the Greenpoint Terminal Market showed the property on the market at $481 million.
The ad stated, “Land, Land and More Land, On The Waterfront, 852,160 SF, 10 Lots, $481,000,000 ... Investors, Developers ... Contact Broker & Dealmaker Frantz.”
The ad went on to include extensive descriptions of the individual lots, zoning calculations, lot coverage and the public waterfront access plan (as required by the new zoning regulations).
"Offers were being made daily on this piece," Joseph Kosofsky, a lawyer for Mr. Guttman, said in a May 4th NY Times story. "Everybody wants to be your partner."
One prospective buyer stood out: Baruch Singer, 52, a veteran developer. His offer did not have the sort of restrictive clauses and riders that Mr. Guttman found in the others, Mr. Kosofsky said.
"It was all cash," Mr. Kosofsky said. "It looked like a slam-dunk, in terms of a simple deal. They were going to buy it without any conditions or anything else."
Mr. Singer was involved in a dispute in 2000 with tenant groups and the federal Housing and Urban Development Department. The department blocked Mr. Singer from bidding on a Harlem property the department owned after it was alerted to a long record of complaints against him. Over the years, city housing officials have cited Mr. Singer's buildings for thousands of code violations.
According to the lawsuit Mr. Singer has filed in connection with the deal for the Greenpoint buildings, he planned to develop two of the property's six sites into condominiums quickly, and then pour the proceeds into the four remaining sites. Mr. Guttman agreed to help the deal through the maze that is familiar to anyone in theNew York City real estate business, the lawsuit states.
"All of it looked like it was a go," Mr. Kosofsky said.
Mr. Guttman had hired Perkins Eastman Architects to prepare a proposal for development of the site. Their proposal called for about 2.6 million square feet of residential space over 14 acres stretching from Oak Street to Greenpoint Avenue.
Several tall buildings were in the proposal, the biggest being 35 stories.
But the developers found that they could not begin work on the two fast-track sites until they won approval from the Department of City Planning for a "master plan" for the whole property.
That would have been impossible to do before the Jan. 17 closing date, the lawsuit states. A spokesman for the planning department said there was no requirement for a "master plan," but that a plan for waterfront access was required.
Mr. Singer's financing for the property fell through, Mr. Kosofsky said.
Mr. Singer contends in the lawsuit that they "orally agreed" to put off the closing date for at least six months. He says Mr. Guttman, continued to help him with the Department of City Planning after the closing date had passed.
"But Guttman has apparently had a change of heart and now pretends there was no agreement to extend the closing. The lawsuit says Mr. Guttman has kept the $42 million down payment. Some of the details of the troubled sale were reported in the May 3rd New York Sun.
Members of the Municipal Art Society and the Williamsburg Greenpoint Waterfront Preservation Alliance along with the Preservation League of New York State were attempting to preserve and Landmark the site.