Two Developers Are Set To Fight Over Blaze Site
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With the blaze that destroyed much of a 14-acre site on the Brooklyn waterfront not yet fully extinguished, two developers are set to appear in court next week in their $424 million fight over the property.
Properties controlled by both Joshua Guttman, who owns the Greenpoint site, and Baruch Singer, who was trying to buy it, have been investigated by the city for suspicious events in the past.
Fire officials have suggested the Brooklyn blaze was intentionally set due to the speed in which it engulfed the warehouse buildings that are slated for demolition.
Mr. Singer, a landlord turned developer, is suing Mr. Guttman to resurrect an 8-month-old contract for $424 million to buy the property and develop it into a luxury condominium complex.
According to court documents, Messrs. Singer and Guttman did not close on the deal by the January deadline because Mr. Singer came up short on financing.
Mr. Guttman then voided the deal, and seized Mr. Singer’s $42 million deposit.
In the lawsuit, Mr. Singer contends that Mr. Guttman is trying to wiggle out of an agreement to extend the closing date by six months. He is seeking to reopen the contract or receive a refund of his $42 million deposit.
Mr. Singer, the prospective buyer, has consistently been cited by tenant groups as one of the worst landlords in the city. In 1995, the district attorney of New York County, Robert Morgenthau, conducted an investigation of a six-story Harlem building controlled by Mr. Singer that collapsed and killed three people. Mr. Morgenthau did not file criminal charges against Mr. Singer because the collapse was not “reasonably foreseeable,” according to a press release his office issued at the time. Mr. Singer’s buildings have reportedly racked up more than 4,000 violations with the city’s department of Housing Preservation and Development.
Phone messages left yesterday at the offices of Baruch Singer and his lawyer, Sean O’Donnell, were not returned.
The city’s fire probe will mark the second time that a building owned by Mr. Guttman will be investigated for arson.
Mr. Guttman, who real estate industry sources say is worth hundreds of millions of dollars, owned a loft building in DUMBO that burned down in 2004, prompting an investigation by the city. Mr. Guttman 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 Goldstein, would not comment on the pending litigation. But Mr. Goldberg said that his client does not stand to make any money from the fire. “There was no property damage insurance on this property,” he said.
“There is a perception of what people think of my client, but he is not the kind of guy who is going to make a million bucks or ten million bucks off a fire,” Mr. Goldberg said.
The lawyer speculated that the fire could have been started by squatters in the buildings or by scavengers looking for scrap metal to sell.
A fire department spokesman, Tom Kane, said yesterday that the Greenpoint blaze was brought under control at around 5 p.m. yesterday. He said a physical examination of the site to determine its cause will begin today. A fire official was spotted yesterday removing what appeared to be a plastic gasoline container from the site.
In September, Mr. Singer sold a portfolio of more than 100 Harlem buildings for about half a billion dollars and started in the development business. He invested heavily in a residential development in Manhattan’s Herald Square in January, and was planning to develop the Greenpoint site into more than 2 million square feet of residential space, stores, and a park.
He met with the city’s Department of Planning in December with plans by the architectural firms Perkins Eastman, according to a spokeswoman for that department. The talks were considered “preliminary” and no formal site plan application was submitted.
It is unclear if Mr. Singer is still interested in buying the Greenpoint property. A representative of the brokerage that represented him in the contract with Mr. Guttman, Extreme Realty, LLC, would not comment for this article.
There are also lingering questions as to whether Mr. Guttman is seeking to sell the site to another developer or build it out himself.
According to two sources familiar with the deal, Mr. Guttman’s Greenpoint property, which he bought for $24 million in 2001,has been shopped by other brokers since the Singer deal fell apart. In March, an advertisement appeared online to sell the property for $481 million.
Also, Mr. Guttman filed applications with the department of buildings indicating that he intended to demolish the buildings himself, a sign, some say, that he might have been contemplating moving forward with his own construction.
Some real estate and development experts said it wouldn’t make sense for a building owner to commit arson on his own property. Demolition of a standing building, they said, would be cheaper than demolition of a half-burned one.
The president of the Real Estate Board of New York, Steven Spinola, said, “I don’t understand how it would be better to burn down these buildings, rather than just demolishing them.”
Mr. Spinola, and other real estate analysts, questions whether the land in Greenpoint is worth what Mr. Singer was supposed to pay for it – $424 million – or as much as $175 per square foot of developable space.
Mr. Spinola said that estimates for the value of land in Greenpoint is closer to $100 per square foot.