A Rhode Island consultant claims that Ginsburg Development Cos. owes $500,000 for its share of profits in a Brooklyn project.
DDD Properties LLC sued Ginsburg Development LLC of Valhalla, Ginsburg Development Companies LLC of Manhattan and Martin Ginsburg on Nov. 13 in Westchester Supreme Court.
The companies “engaged in a shell game,” DDD principal Douglas Brout alleges, “to divert or veil their interests” in the Brooklyn project.
Martin Ginsburg and an attorney for Ginsburg Development Cos., Mark Ginsburg, did not immediately respond to telephone and email messages requesting their side of the story.
The Brooklyn project was a renovation of two 1800s midrise loft buildings at 220 Water St. in the Dumbo neighborhood. The former shoe factory was gutted, according to news accounts, and converted to 135 apartments in 2012.
DDD Properties of Little Compton, Rhode Island, and Ginsburg Development signed a consulting deal in 2004. If Ginsburg Development or any of its affiliates acquired 220 Water St., according to the complaint, DDD was to receive 5 percent of net profits from rentals and other income.
DDD Properties agreed to work 30 hours a week on the project. It claims it provided several services, such as doing an environmental analysis, applying for state tax credits, working with architects and contractors on design and development.
Ginsburg Development terminated the consulting agreement in 2008. Years later, DDD alleges, Ginsburg Development and Ginsburg Development Companies claimed that neither they nor any related entities had ever acquired an interest in 200 Water St.
The lawsuit describes numerous transactions from 1997 to 2011, involving several similarly named limited liability companies, trusts and funds, concerning ownership of the property. DDD claims that the entities are connected to Ginsburg Development, Ginsburg Development Companies, Martin Ginsburg, and his brother Samuel, who is not named as a defendant in the complaint.
The purpose of the multiple transactions, DDD claims, was to conceal the developers”™ interests in the property.
“This deception,” the complaint states, “was initiated and orchestrated so that Ginsburg Development would avoid paying monies rightfully owed DDD under the consulting agreement.”
The allegations are similar to charges DDD made in a 2013 lawsuit filed against the Ginsburg companies. Brout claimed then that Ginsburg companies owed $500,000 for DDD”™s work on Christie Place condominium in Scarsdale.
The Ginsburg companies filed a counterclaim stating that they had actually overpaid DDD and were owed nearly $700,000.
The parties settled the dispute in 2014, with Ginsburg Development Cos. agreeing to pay DDD $385,000.
DDD is represented in the new lawsuit by Andrew Greene, White Plains.
