Times and Sun (2 articles) on Greenpoint fire

Date: Thu, 04 May 2006 04:15:52 -0400
To:
From: "Kitchen"
Subject: Times and Sun (2 articles) on Greenpoint fire

May 4, 2006

As Waterfront Smolders, Attention Turns to a Failed Deal
NY Times
By MICHAEL WILSON

The 15 buildings at the Greenpoint Terminal
Market in Brooklyn that were gutted in a
spectacular 10-alarm fire on Tuesday were at the
center of a complex real estate deal gone wrong
between established and, at times, controversial
developers. They were tangling over property that
was itself the target of neighborhood
preservationists hoping to secure the district's legacy as a landmark.

Firefighters continued dousing the smoldering
blocks along West Street and Noble Street on the
Greenpoint waterfront yesterday. Officials
suspect arson, and investigators were waiting for
a chance to search for evidence.

The buildings are now in ruins and may be a crime
scene, and even before the fire, they did not
look like much to a passer-by, just relics from a
bygone time when they produced bales of rope for
the shipyards along the East River.

But the property's value skyrocketed last year,
when a prospective buyer placed a $42 million
down payment, a tenth of the entire $420 million
deal, and by itself almost twice what the owner
had paid for the property five years earlier. Now
a lawsuit seeks the return of the $42 million and
describes how the deal fell apart.

Preservationists, who had failed in recent
efforts to secure landmark status for other
Brooklyn buildings, started a campaign to keep
the Greenpoint Terminal Market from being knocked
down, seeking the support of the local city councilman, David Yassky.

Whether the site's value, its status as a
landmark and the continuing legal battle have
anything do with the inferno on Tuesday is
unknown. Fire marshals have been unable to enter the site.

Other aspects of the investigation are already
under way, however, including background checks
and interviews with people connected to the
warehouse complex. Nearby surveillance cameras
are being examined, and investigators are
checking neighbors' reports that squatters frequently used the
buildings.

The buildings were owned by Joshua Guttman, 58,
of Lawrence, in Nassau County, a longtime
developer of industrial sites in Brooklyn, who
bought the buildings in 2001 for about $25
million with an eye toward flattening them. He
applied for demolition permits with the city's
Department of Buildings in March 2001, but for
the most part the buildings stood dormant.

That changed last year when the neighborhood
zoning was revised from commercial to
residential, sending brokers and prospective
buyers hurrying to Mr. Guttman's door.

"Offers were being made daily on this piece,"
Joseph Kosofsky, a lawyer for Mr. Guttman, said
yesterday. "Everybody wants to be your partner."

One prospective buyer stood out: Baruch Singer,
52, a veteran developer. His offer did not have
the sort of restrictive clauses and riders that
Mr. Guttman found in the others, Mr. Kosofsky said.

"It was all cash," Mr. Kosofsky said. "It looked
like a slam-dunk, in terms of a simple deal. They
were going to buy it without any conditions or anything else."

Mr. Singer was involved in a dispute in 2000 with
tenant groups and the federal Housing and Urban
Development Department. The department blocked
Mr. Singer from bidding on a Harlem property the
department owned after it was alerted to a long
record of complaints against him. Over the years,
city housing officials have cited Mr. Singer's
buildings for thousands of code violations.

According to the lawsuit Mr. Singer has filed in
connection with the deal for the Greenpoint
buildings, he planned to develop two of the
property's six sites into condominiums quickly,
and then pour the proceeds into the four
remaining sites. Mr. Guttman agreed to help the
deal through the bureaucratic maze that is
familiar to anyone in the New York City real
estate business, the lawsuit states.

"All of it looked like it was a go," Mr. Kosofsky said.

Mr. Guttman had hired Perkins Eastman Architects
to prepare a proposal for development of the
site. Their proposal called for about 2.6 million
square feet of residential space over 14 acres
stretching from Oak Street to Greenpoint Avenue.
Several tall buildings were in the proposal, the biggest being 35
stories.

"I was trying to give City Planning a vision for
what could happen on that site," said Bradford
Perkins, an architect and senior partner.

But the developers found that they could not
begin work on the two fast-track sites until they
won approval from the Department of City Planning
for a "master plan" for the whole property, the lawsuit says.

That would have been impossible to do before the
Jan. 17 closing date, the lawsuit states. A
spokesman for the planning department said there
was no requirement for a "master plan," but that
a plan for waterfront access was required.

Mr. Singer's financing for the property fell through, Mr. Kosofsky
said.

Mr. Singer contends in the lawsuit that they
"orally agreed" to put off the closing date for
at least six months. He says Mr. Guttman, who is
referred to in the lawsuit as "Seller," continued
to help him with the Department of City Planning
after the closing date had passed.

"But Seller has apparently had a change of heart
and now pretends as if there was no agreement to
extend the closing," the lawsuit states. The
lawsuit says Mr. Guttman has kept the $42 million
down payment. Some of the details of the troubled
sale were reported yesterday in The New York Sun.

Mr. Guttman's lawyer dealing with the lawsuit,
Israel Goldberg, declined yesterday to address
the specifics of Mr. Singer's accusations. "Mr.
Singer was held in default, and the contract was canceled," he said.

Mr. Guttman did not return calls for comment
yesterday. His wife, Vera, said: "He's a
hardworking man. That's exactly what it is. He's
been working all his life. That's it, there's nothing more."

Mr. Singer did not return phone calls made to the
address of his main management company, Triangle
Management. His brother, Eli Singer, challenged
any suggestion that his brother had been involved in any untoward
activity.

"He's a wonderful human being," he said. "He
would probably pay every penny that he had not to
have anything to do with arson. He's as straight as an arrow."

Preservationists had increased their efforts
after last year's rezoning of almost 200
waterfront blocks of Brooklyn. In April 2005, the
Municipal Art Society presented a 23-page report
listing 264 buildings it said were eligible for
historic designation. At the top of the list were
the buildings of the Greenpoint Terminal Market.

Officials with the State Historic Preservation
Office and the city's Landmarks Preservation
Commission visited the site on Feb. 22 and noted
that it had significantly deteriorated in the
last five years, said Cassi Jimenez, a spokeswoman for the state
office.

The preservationists approached Councilman
Yassky, an unlikely ally, since he led the effort
last year to revoke the landmark status of the
Austin, Nichols & Company warehouse in the
Williamsburg section of Brooklyn, a 1915 building
designed by Cass Gilbert. He said he would help
in Greenpoint, said Evan Thies, a spokesman.
"David certainly thought that it was a good idea
to landmark all or parts of the Greenpoint Terminal Market," he said.

However, Diane Jackier, a spokeswoman for the
Landmarks Preservation Commission, said the panel
never decided to go ahead with a
historic-district designation for the area. Such
an effort would have required a public hearing
and then a vote by the commission, and neither was ever scheduled, she
said.

"Our industrial waterfront is disappearing very
fast in the face of development," said Mary
Habstritt, president of the New York and New
Jersey chapter of the Society for Industrial
Archeology. "We're trying to get ahead of the
development and get some of the important sites
landmarked. Obviously, we didn't get far enough,
fast enough with this one. Losing this one so dramatically is quite
wrenching."

Reporting for this article was contributed by
Sewell Chan, Nicholas Confessore, Kareem Fahim,
Colin Moynihan, William Neuman and Margot Williams.

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

Publication: The New York Sun; Date:May 4,
2006; Section:Front Page; Page:1

Two Developers Are Set To Fight Over Blaze Site
By DAVID LOMBINO
Staff Reporter of the Sun

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.

TOTING GAS TO SAFETY A city fire marshal carries
a gasoline canister away from the scene of
Tuesday�s fire at warehouses in Brooklyn. KONRAD FIEDLER



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