The Real Deal: 30 Lincoln Square
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The Real Deal: Marc Held, Partner at Held & Hines, is quoted re: 30 Lincoln Square
Tenants sue Milstein at 30 Lincoln Plaza May 23, 2011 03:30PM By David Jones 30 Lincoln Plaza and Milstein CEO Howard Milstein Five tenants at 30 Lincoln Plaza have filed suit against Milstein Properties alleging the firm previously sold condominium units to outside buyers at huge discounts, but refused to offer the same deals to existing residents, and now refuses to allow them to close on their purchase agreements. The suit, filed May 5 in New York State Supreme Court, alleges fraud, breach of contract and other claims against the developer, which owns the 33-story tower at 30 West 63rd Street, near Central Park. The suit alleges that prior to the downturn Milstein had promised to sell apartments to existing tenants at 25 percent off the price offered to outside buyers, but the developer cut prices to outside buyers following the downturn and refused to offer additional cuts to the original tenants. “When the real estate market collapsed in the fall of 2008, the defendants, in violation of covenants contained in the plan, sold numerous units to outside purchasers at a fraction of the price offered to the bona fide tenants, without offering the aforesaid reductions in price as promised in the plan,” wrote attorney Marc Held, in the complaint. According to the complaint, 46 bona-fide tenants at the building signed agreements to buy their apartments at an average price of $1,404 a square foot, while during the same period, 70 outside buyers signed agreements to buy apartments at $956 a square foot. After offering the discounts in 2007, the purchase period for tenants to buy their apartments at a 25 percent discount was extended four times until July 2008. The suit alleges that after the exclusive period for tenants to buy expired in 2008, the developer gave certain tenants special discounts of up to 50 percent, and tried to conceal the arrangement by identifying the buyers as outside buyers. The suit also alleges these tenants were given apartment upgrades and closing costs were waived.
The suit claims apartment 8C was listed for $1.88 million, and would have been purchased for $1.4 million under a legal discount of 25 percent, but the buyer, who previously lived in apartment 30E, was allowed to buy the apartment for $825,000, a 56 percent discount. “The aforesaid purchase agreement constituted ‘discriminatory inducements’ in favor of certain favored ‘tenants in occupancy’ in violation of the plan,” Held wrote in the complaint. The suit claims that the tenants in the current lawsuit have purchase agreements they want to close, but that Milstein is refusing to renovate some of the units and is preventing them from closing because he can sell the units at higher prices on the open market. In October 2009, former Attorney General Andrew Cuomo’s office reached a $100,000 settlement with Milstein over allegations that the company failed to disclose the price reductions in an amendment to the condominium offering plan, according to the lawsuit. As part of the settlement, the developer neither admitted nor denied guilt. As The Real Deal previously reported, tenants at 30 Lincoln Plaza filed suit in December 2009 against Milstein and Cuomo in state Supreme Court asking that the regulator reverse the 2007 approval of the condo offering plan. In October 2010, Judge Saliann Scarpula ruled against tenants in that lawsuit, saying that the lead complainant, Vera Salnikova, was a non-purchasing tenant and therefore not entitled to an extension of the purchase period. Milstein officials declined to comment as did officials at the AG’s office.
