Real Estate Matters

Mediator – High Profile Real Estate Business Divorce
Acting as mediator and special master for discovery in a high-profile business divorce involving a family-owned real estate investment firm with significant office and retail holdings in the New York metropolitan area.


Brooklyn Bridge Park Developers – Dismissal of Lawsuits Seeking to Halt Construction
Successfully defended the developers of a $320 million Brooklyn Bridge Park hotel and condominium project, defeating two lawsuits filed by activists seeking to halt construction of the project. In a decision of significance to the New York real estate industry, Herrick secured an order in New York state court denying plaintiffs’ motions for both an injunction and a declaratory judgment that the planned buildings exceeded height limitations specified in the project’s governing documents. The court found that the development complied with the law and further ruled the legal challenge barred by the statute of limitations for bringing an Article 78 proceeding. Herrick then defeated a second lawsuit claiming to assert a different land use violation, securing dismissal of the complaint on the grounds of failure to exhaust administrative remedies, statute of limitations and res judicata. Herrick continues to represent the clients on the plaintiffs’ appeal.


Developer – Successful Defense in Breach of Contract and Fraud Dispute
Herrick successfully defended Muss Development in the Appellate Division, First Department appeal of Princes Point LLC, et al. v. Muss Development LLC et al., a case involving the plaintiff's breach of a $36 million contract to purchase Princes Point, a 23-acre waterfront parcel of land on the south shore of Staten Island, from Muss. The First Department unanimously confirmed Herrick's earlier Supreme Court, New York County victory for Muss, which entitles the real estate developer to retain the plaintiffs' approximately $4 million deposit plus other fees totaling nearly $1 million. In doing so, the court delved into an area where there was a dearth of case law in New York – namely, whether a prospective real estate purchaser anticipatorily breaches a sale contract by commencing an action against the seller for rescission before the closing date, and whether, in that event, the seller is required to show that it was ready, willing, and able to complete the sale. The court held that the plaintiff had anticipatorily breached the contract and that Muss is entitled to keep the deposit and other significant fees without having to show that it was ready, willing and able to close. Once there was a breach , there was no need to spend time and money preparing for a closing that was not going to happen.


Developer – Seeking in Excess of $50 Million in Dispute with the City of Long Beach
Representing a real estate owner/developer in a high-profile dispute with the City of Long Beach, New York over zoning ordinances relating to a planned four tower residential project. In what has become one of the longest-running land use litigations in the country, Herrick helped to secure significant appellate wins, including an order permitting our client to seek damages in excess of $50 million, including interest and legal fees, against the City, and a judgment declaring it entitled to a building permit that would allow completion of the ocean front development as originally approved. In more recent rulings, the Appellate Division, Second Department held that the City had defaulted in serving an amended answer to our suit and failed to proffer a legally sufficient excuse for its default. The court further held that the individual City defendants named in our complaint should not have been dismissed from the litigation by the trial court and can therefore be held liable for damages.


Fashion Designer – Flagship Manhattan Store Leasing Dispute
Working with co-counsel, Herrick obtained a number of favorable rulings involving millions of dollars on behalf of a leading fashion designer as plaintiff in litigation with the landlord of its flagship Manhattan retail location. Prior to reaching a settlement, victories on behalf of the client included a ruling enjoining the landlord from terminating our client’s lease, an order that our client continue paying the current rent under the lease rather than the much higher amount requested by the landlord, and a decision rejecting the landlord's motion for our client to post an $83 million bond “for lost opportunity damages” related to plans to demolish and redevelop the site, and instead requiring a bond of only $750,000. The dispute was resolved in a settlement, pursuant to which the client obtained a new, long-term lease.


Real Estate Developer – NYS Attorney General Investigation Resolved Favorably
Achieved a highly favorable settlement involving no admission of wrongdoing on behalf of a real estate developer and two of its principals in an investigation by the New York State Attorney General into alleged improper lead removal procedures and harassment of tenants.


Real Estate Owners – “Baseball Arbitration” and Litigation over Valuation and Buy-out of NYC Shopping Center
Herrick delivered a major victory to real estate owners in a buy out dispute between partners over the valuation of a New York City shopping center that they co-owned. Prior to Herrick's involvement, the opposing party had won the right to buyout our clients' interest in the retail center, with the purchase price to be set based on a neutral appraiser's determination as to which party's appraisal was more accurate. The firm achieved two decisive victories on behalf of our clients in New York Supreme Court, obtaining an order that the appraisal process move forward immediately and then that the "date of valuation" was to be current rather than a 2012 date that the parties had previously discussed.  Thereafter, two months of extensive appraisal proceedings ensued, and our valuation was ultimately chosen over the opposing party's assessment, which was many millions of dollars lower.  The valuation date decision was affirmed, with costs, by the Appellate Division, Second Department.


Midtown Manhattan Office Building – High-Value Commercial Leasing Dispute
Represented an affiliate of one of the nation’s largest owners, developers and managers of class A office space as landlord of a Midtown Manhattan office building in a leasing dispute with a high profile hedge fund tenant and two unauthorized sub-tenants over unpaid rent and associated charges totaling nearly $3 million. Shortly after commencing litigation, the firm negotiated a settlement which allowed the client to quickly recover possession of the space.


Mezzanine Lenders – Stuyvesant Town-Peter Cooper Village Litigation
Herrick and co-counsel successfully represented junior lenders in litigation related to the foreclosure of Stuyvesant Town-Peter Cooper Village, Manhattan's largest housing complex, which our clients alleged was based on a flawed premise, designed to provide an unjust windfall of approximately $1 billion to the defendants at the expense of junior lenders. This litigation, fought primarily in New York state court, was ultimately settled in an agreement that resolved all claims between the parties and helped clear the way for a future sale of the complex.


Staten Island Retail Center Complex Development
Representing the Alpert family in connection with the development of a large shopping center complex in Staten Island. Our work includes a significant Uniform Land Use Review Process application involving street mappings, special permits, government relations activities and an environmental impact statement.


International Residential Developer – Regulatory Investigations
Advising one of the world’s largest residential developers with respect to regulatory investigations relating to the removal of deed restrictions on a Manhattan property.


Outlet Mall Developer – Regulatory Investigation
Representing the developer of a New York City outlet mall in an investigation into whether New York State Empire Development Corporation’s financial support for economic development projects has been influenced by developer political contributions.


Construction Firm – NYC Department of Buildings Investigation
Negotiated a highly favorable settlement on behalf of a construction firm to resolve an investigation by the NYC Department of Buildings into the alleged filing of a false affidavit with a governmental agency.


Manhattan Developer – Construction Delay Issues
Advising one of the premiere developers of Manhattan luxury residential condominiums in connection with a construction agreement and construction delay issues involving the general contractor and a subcontractor on a new $450 million luxury condominium tower.


Real Estate Contractor / Investor – Partnership Dispute
Representing an experienced contractor and real estate investor in litigation with a former business partner over proceeds from the sale of two Brooklyn properties.


Sponsor – Brooklyn Waterfront Residential Tower Construction Defect Dispute
Negotiated a favorable settlement on behalf of the sponsor of a luxury condominium tower on Brooklyn’s waterfront to resolve construction defect claims by the condominium’s board.


Lender and Special Servicer – $126 Million Mortgage on Miami’s Shore Club Hotel
Represented the lender and mortgage servicer in litigation against a hotel developer filed in Nassau County Supreme Court and in the Appellate Division, Second Department. The underlying dispute involved an action filed by our clients in Florida seeking to foreclose the $126 million mortgage on the Shore Club Hotel in Miami, and the hotel developer's ultimately unsuccessful attempts to derail that action. Having slipped a purchase option into a hotel tenant's lease, which purported to convey to the tenant a right to purchase the mortgage loan at fair market value, the developer then "purchased" the option from the tenant and sought to enforce that option in the Florida foreclosure action. On the eve of an expected adverse ruling in Florida, the developer brought its claim to Nassau County, where the trial court granted a preliminary injunction, effectively preventing our clients from foreclosing the mortgage. We filed an appeal and obtained a reversal, resulting in the dismissal of the Nassau County action. Leave to appeal was denied by New York's Court of Appeals.


New York State Association for Affordable Housing – Challenge to Local Law 44
Representing the New York State Association for Affordable Housing and individual developers in litigation seeking to invalidate Local Law 44 - which requires any developer receiving city funding to submit quarterly wage reports - as unconstitutional, pre-empted by New York state law, and imposing an unreasonable economic burden on small businesses competing for affordable housing work.


Affordable Housing Developer – Resolution of Breach of Contract Claims against NYCHA
Negotiated a favorable settlement on behalf of a national developer of affordable housing, resolving a breach of contract litigation against the New York City Housing Authority related to a high-profile and long-stalled project to redevelop a large New York City public housing complex. 


Real Estate Executive – Public Corruption Prosecution
Representation of a business executive charged by the U.S. Attorney's Office for the Southern District of New York with conspiring to bribe a public official and money laundering. Resulted in the U.S. Attorneys' Office determining to drop all charges against our client.


REIT – Office Building Settlement
Representation of a major, publicly-owned REIT in obtaining a favorable settlement in a multi-million dollar litigation related to cleaning and maintenance services at four large office buildings in New York City. 


Major Publicly-Owned REIT – Settlement with Prospective Tenant
Representation of a major, publicly-owned REIT in reaching a favorable settlement with a prospective 400,000 square foot tenant of a proposed major office building, arising from the REIT's decision to suspend development due to condition of the local real estate market.


Las Vegas Conference Center Real Estate Investors – Arbitration Victory
Representation of one of three investor groups in an existing five million square foot conference and exhibit center in Las Vegas in a seven-week, three-panel arbitration over each investor group's rights and ownership in the project. The panel found that all parties to the transaction, except Herrick's clients, had engaged in wrongful conduct. The conference center, at its completion, will cost more than $1 billion to build and is planned to expand to 12 million square feet.


Real Estate Board of New York – Mitchell-Lama Litigation
Representation of the Real Estate board of New York in its successful lawsuit against the New York City Council to overturn Local Law 79. The law required owners of Mitchell-Lama housing and housing subsidized by certain federal programs to give a right of first refusal to purchase their projects to tenants, pursuant to an ambiguous and burdensome process. The Court found that the law was preempted by federal and state housing laws, and enjoined the City from enforcing it.


Financial Media Company – Lease Dispute
Representation of a multi-billion dollar financial media company in a lease dispute involving approximately 180,000 sq. ft. of office space.


Real Estate Developer – Mixed Use Conversion
Successful representation of a developer in litigation over its right to convert a building it purchased from office/retail use to mixed office/retail and residential use.


Subsidized Housing Project Sponsor – Market Rate Conversion
Representation of a sponsor in settling a litigation involving the sponsor's effort to convert one of New York City's largest Mitchell-Lama subsidized housing projects (some 1,200 units on Manhattan's Upper East Side) to market rate housing. The settlement involved the creation of entirely new subsidy programs by the city and by the sponsor, and an approximately $550 million condominium conversion.


Joseph Kahan – Arbitration Award Vacated
Representation of Joseph Kahan in successfully petitioning the Kings County Supreme Court to vacate a rabbinical court's arbitration award regarding competing claims to real properties in Brooklyn and other assets. The arbitration agreement provided that the parties could proceed only with counsel acceptable to the arbitrators. Kahan participated in the arbitration even after the arbitrators rejected his proposed counsel and insisted that he could proceed only with counsel they would select for him. Initially, Kahan proceeded without counsel at all, but as the matter progressed, he realized that the arbitrators' procedures were unfair and he withdrew from the arbitration before the panel ruled. Describing its ruling as one of first impression under New York law, the court agreed that the arbitrators had denied Kahan the right to counsel of his choice, and overturned the award. This case was featured in the November 24th 2009 edition of the New York Law Journal. (26 Misc.3d 615, 889 N.Y.S.2d 839 (2009))


R.I. Island House LLC v. North Town Phase II Houses, Inc. – Mitchell Lama Contract Dispute
Representation of a major developer in enforcing a $100 million contract to sell a Mitchell Lama project on Roosevelt Island, New York. The trial court dismissed our complaint, but the Second Department, relying on our legal arguments, reversed the lower court and permitted the claim for specific performance to move forward. (R.I. Island House LLC v. North Town Phase II Houses, Inc. (2nd Dep't, May 2008)).