Arch Companies Sues JV Partners in SoHo Apartment Building Dispute
By Celia Young October 26, 2022 5:59 pm
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It took more than two decades to get the ritzy SoHo apartment building at 11 Greene Street off the ground, but the six-story property isn’t out of the woods yet.
Arch Companies sued its joint venture partners Perot 11 Greene Investor LLC (an entity which shares an address with ABS Partners) and TDRT 11 Greene Street LLC for allegedly failing to reimburse Arch for the $1.14 million it invested in the 31-unit luxury rental asset, according to a lawsuit filed Tuesday in New York County Supreme Court.
The developer also wants the court to hold onto the joint venture’s $1.3 million in leftover construction funds and security deposit income, because it is worried Perot and TDRT will seize the money before paying its debts to Arch, the filing alleged.
Arch, its attorneys and ABS did not immediately respond to requests for comment.
The Greene Street development was originally planned by Thor Equities but languished for nearly two decades thanks to the real estate market’s downturn after 2001 and the Landmarks Preservation Commission‘s slow process to approve the Gene Kaufman design for the historic building, City Realty reported.
Arch took over the project from Thor in 2018 and, armed with $45 million in construction financing from Maxim Capital Group, started leasing out the property in 2021. The building opened in July after it secured a certificate of occupancy, according to a spokesperson for the New York City Department of Buildings.
Arch claims it spent about $486,635 to complete the property and hired third-party vendors itself to do the job, but in September was removed as the manager of the JV by its partners and asked to hand over the leftover construction funds without reimbursement.
“After reaping the benefits of Arch’s work and expertise, Perot has engineered to deprive Arch and its affiliates of the amounts they are owed,” Arch claimed in the suit.
Arch also alleged Perot hasn’t distributed the proceeds from the $45 million refinancing Valley National Bank provided in September, and said it won’t be able to pay the contractors without those funds, according to the lawsuit and property records.
But the JV should seemingly be flush with cash since the building is fully leased with two- and three-bedroom units fetching $10,000 and $14,500 a month, respectively, according to City Realty and 11 Greene’s website.
Celia Young can be reached at cyoung@commercialobserver.com.
