The 10-alarm fire in Brooklyn yesterday began in a warehouse whose value had recently soared by hundreds of millions of dollars because of Mayor Bloomberg’s plan to turn a desolate waterfront into a residential neighborhood full of condominium towers with views of Manhattan.

A contract to sell the 14-acre waterfront parcel is tied up in litigation between the property owner, Joshua Guttman, and a former partner, Baruch Singer, a Harlem landlord turned developer, according to a source familiar with the deal. Messrs. Guttman and Singer each have racked up thousands of violations with the Department of Buildings, developers and real estate analysts said.

The burned-out buildings, making up part of the Greenpoint Terminal Market, sit in some of the choicest segments of a sweeping rezoning of the Greenpoint/Williamsburg area that the Bloomberg administration shepherded through the city’s approval process last year.

Mr. Bloomberg and his economic development advisers envision dense residential development in the area to accommodate population growth and booming residential demand. The old industrial waterfront lots are destined to become condos, and the city has dedicated money to acquire land to build a park. Since the rezoning first came onto developers’ radar, the prices of waterfront properties have skyrocketed.

Mr. Guttman purchased the property for about $24 million in 2001, two sources familiar with the deal said. According to press reports, he was going to flip it for more than $450 million, after a rezoning by the city that would allow dense residential development.

The fire commissioner’s announced yesterday that the circumstances of the fire are considered “suspicious.” This will be the second time that a building owned by Mr. Guttman will be investigated for arson.

Mr. Guttman owned a loft building in DUMBO that burned down in 2004, causing an investigation by the New York City Joint Arson Task Force. He was never charged, but some suspected that the landlord had started a fire to allow him to convert the building into luxury units.

A lawyer representing Mr. Guttman, Israel Goldberg, said the DUMBO fire was determined to be “accidental in nature.”

Mr. Goldberg said yesterday’s fire was not arson, and he said there may have been squatters at the site. “Certainly to our knowledge this is not the product of arson. But certainly from what we know it was not done with any deliberation on anybody’s part,” Mr. Goldberg said.

Only about a third of the Greenpoint Terminal Market was affected by yesterday’s blaze, area residents said. There are several indications that the buildings were slated for demolition and development.

On the Web site of the architectural firm Perkins Eastman, impressive color renderings of a planned luxury development called “Greenpoint District Terminal” envision a cluster of shiny glass towers, a retail center, and waterfront restaurants in a public park facing Manhattan’s jagged skyline.

For more than a year, the development has been dormant.

Soon after he purchased the property in 2001, Mr. Guttman filed for a permit for demolition, a spokeswoman for the Department of Buildings, Jennifer Givner, said. The application became inactive for a number of years and then became active again this March, she said. The application listed May 1 as the date to begin demolition, but the application was incomplete and the final demolition permit was not granted, Ms. Givner said.

According press reports in January, Mr. Guttman was planning to flip the property to Mr. Singer, the landlord, for about $450 million. Reports said Messrs. Singer and Guttman initially would partner on the project, but that eventually Mr. Singer sought to buy out Mr. Guttman’s rights.

In March, the development site appeared on an Internet real estate database, Craigslist.org, listed for sale for $481 million. It was later pulled from the site.

“There is no, at this juncture, indication who was going to develop it,” Mr. Goldberg said.

Mr. Singer recently sold a building portfolio in Harlem for about $500 million and is involved in a condo conversion project near Herald Square worth about $240 million. Tenant groups around the city have consistently named Mr. Singer as one of the city’s worst landlords. Messages left with Mr. Singer’s office were not returned.

According to the Municipal Art Society, the Greenpoint Terminal Market was built in 1890 and was originally home to the American Manufacturing Company, one of the largest rope manufacturers in the world. The Municipal Art Society, along with several community groups, were seeking landmark status for parts of the complex, but the city’s Landmark Preservation Commission had not moved on any proposals.