Muss Absolved, Yet Again, of Wrongdoing in $38M Staten Island Development Sale
By Terence Cullen February 9, 2016 12:45 pm
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A state supreme court appellate panel has upheld a nearly two-year-old decision on a longstanding Staten Island bruhaha involving a land deal gone bad by the Queens-based Muss Development.
In court documents filed last week, the panel found that allegations by Prince’s Point, an LLC, that Muss provided misleading information did not hold water because the LLC had sued Muss before the former prior to the 23-acre development property’s sale.
The Appellate Division of the New York State Supreme Court ruled in 2014 that the seller shouldn’t be held responsible for problems with a seawall at the development site because the buyer sued Muss before the nearly $38 million sale closed in 2006, according to the decision. That amounted to a breach of contract.
Muss gets to keep the $4 million deposit it received from the prospective sale, along with another $1 million in fees, according to the recent ruling.
The legal drama started in 2004, when the LLC (it wasn’t immediately clear who is behind the LLC) agreed to buy the site, which Muss has owned since the 1970s. The sellers upped the price in 2006 to almost $38 million from the initial 2004 price of $36 million, according to the Feb. 4 ruling. Over the two-year period the deposit also increased to $4 million from $2 million, according to the decision. Before the sale closed for $38 million in 2008, however, Prince’s Point sued on the grounds that the seller hadn’t disclosed that there were problems with a seawall built to protect the land.
But Judge Rolando Acosta wrote last week that the allegations were essentially null and void because Prince’s Point breached the contract by suing before the sale had been finalized. The supreme court had also ruled in an April 2014 appeal decision that Prince’s Point knew about the problems going into the sale, Law360 reported at the time.
Officials from the New York State Department of Environment Conservation found in 2005 that the seawall was defective and not up to its safety standards and required additional work.
Scott Mollen of Herrick, Feinstein represented the defendant and told Commercial Observer that the sale contract states that Prince’s Point could in fact have its own, third-party expert look at the seawall, and let Prince’s Point know that the DEC would be examining the wall.
“Since all of the alleged claims were contradicted by the express terms of the contract, we believe that the purchaser’s commencement of a lawsuit for rescission before the closing date was an improper effort to renegotiate the purchase price,” Mr. Mollen emailed. “We are very appreciative that a unanimous panel of appellate division judges agreed that Muss…had done absolutely nothing wrong and is entitled to retain the contract deposit and other substantial monies that had been paid. “
A spokesman for the law firm representing Prince’s Point, Rosenberg, Calica & Birney, said the attorneys were reviewing the decision and he would refrain from commenting until that is finished.
Muss at several points had considered developing on the land, which is currently zoned to hold 132 detached homes. Contaminated soil issues stalled development there for more than 20 years. The multi-parcel site was once home to the S.S. White Dental Manufacturing Plant, whose buildings burned down in the 1980s, the Staten Island Advance reported in 2015. As Muss razed the remnants in 1986, the company discovered that the ground was filled with chemicals and started to clean up work per state requirements in 1997, which was finished four years later.
The developer put the property back on the market in January 2015, and the Advance speculated it would fetch north of $30 million. HFF is currently marketing the site. A spokeswoman for the brokerage declined to comment.
