A ruling Monday by State Supreme Court Justice Joan Madden "handed a victory to Durst Fetner Residential...removing a nagging legal speed bump the developer was facing at its large Herald Square site at 855 Sixth Avenue between 30th and 31st Streets, according to an article yesterday at therealdeal.com by Adam Pincus.
The legal cloud has hovered over the property since 2006, when two real estate investors sued a group of developers led by Baruch Singer over a failed partnership bid to acquire a portion of the site, the article said, adding that "Durst Fetner became involved in the dispute after it bought the defaulted note for about $104 million from iStar Financial and took title in December 2010 from owners Tessler Developments and the Chetrit Group."
Previous plans, shown at the right, for the site called for a 500,000-square-foot mixed-use tower of about 35 stories with a garage and office space on floors 3 through 16 and almost 200 apartments.
"The potential amount of the claim was in dispute, but a source close to plaintiffs Gary Don, Lawrence Gerstein and their company New York Developers Collaborative said it could have amounted to as much as an 18 percent ownership stake," the article said, adding that the ruling "dismissed the claim affecting Durst Fetner that sought to place a so-called 'constructive trust' on the property, which would have allowed the plaintiffs to gain an equity interest in the site."
The judge allowed the other 10 claims of the suit for monetary awards to go forward against Singer and fellow investors Mark Junger, Moses Rosner as well as three related development companies, the article continued.
Singer's group bought the site in early 2006 for $117.5 million, and then sold it the next year for $140 million to a partnership between the Chetrit Group and Tessler Developments, the article said.
Durst Fetner bought the note last summer for approximately $104 million from iStar Financial, and closed on the purchase of the site located along Sixth Avenue from Tessler Developments and the Chetrit Group in December 2010.
The legal cloud has hovered over the property since 2006, when two real estate investors sued a group of developers led by Baruch Singer over a failed partnership bid to acquire a portion of the site, the article said, adding that "Durst Fetner became involved in the dispute after it bought the defaulted note for about $104 million from iStar Financial and took title in December 2010 from owners Tessler Developments and the Chetrit Group."
Previous plans, shown at the right, for the site called for a 500,000-square-foot mixed-use tower of about 35 stories with a garage and office space on floors 3 through 16 and almost 200 apartments.
"The potential amount of the claim was in dispute, but a source close to plaintiffs Gary Don, Lawrence Gerstein and their company New York Developers Collaborative said it could have amounted to as much as an 18 percent ownership stake," the article said, adding that the ruling "dismissed the claim affecting Durst Fetner that sought to place a so-called 'constructive trust' on the property, which would have allowed the plaintiffs to gain an equity interest in the site."
The judge allowed the other 10 claims of the suit for monetary awards to go forward against Singer and fellow investors Mark Junger, Moses Rosner as well as three related development companies, the article continued.
Singer's group bought the site in early 2006 for $117.5 million, and then sold it the next year for $140 million to a partnership between the Chetrit Group and Tessler Developments, the article said.
Durst Fetner bought the note last summer for approximately $104 million from iStar Financial, and closed on the purchase of the site located along Sixth Avenue from Tessler Developments and the Chetrit Group in December 2010.
Architecture Critic
Carter Horsley
Since 1997, Carter B. Horsley has been the editorial director of CityRealty. He began his journalistic career at The New York Times in 1961 where he spent 26 years as a reporter specializing in real estate & architectural news. In 1987, he became the architecture critic and real estate editor of The New York Post.
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