The U.A.W. returned to the bargaining table on Sunday after its president warned, “We’re going to amp this thing up” if the car companies don’t improve their offers.
In the wake of hurricanes and the BP oil spill, he revolutionized his industry by turning from wild catches to cage farming his precious bivalves.
A Hudson County, New Jersey, real estate investor has been sentenced to 24 months in prison for his role in a fraudulent home equity line of credit scheme that resulted in over $400,000 in losses.
Anthony Garvin, 53, of Jersey City, New Jersey, had previously pleaded guilty to one count of conspiracy to commit bank fraud and four counts of bank fraud via videoconference before U.S. District Judge Katharine S. Hayden, according to a press release from the U.S. Department of Justice.
The sentencing was carried out at the Newark federal court by Hayden.
According to court documents and statements, Garvin orchestrated the fraudulent scheme between 2011 and 2014. He collaborated with others to fraudulently obtain multiple HELOCs on properties he owned.
To deceive lenders, Garvin and his co-conspirators submitted loan applications containing false information and fabricated supporting documents, such as counterfeit pay stubs, W-2 forms, tax returns, bank account statements, and property deeds.
Garvin, in turn, shared the proceeds of this illicit operation with his co-conspirators and ultimately defaulted on all the loans. The fraudulent activity resulted in a staggering $400,000 in losses for the lenders involved.
In addition to the prison sentence, Hayden also sentenced Garvin to three years of supervised release. Two other co-conspirators have previously pleaded guilty and are currently awaiting sentencing.
Last week, Cabral Simpson, a 46-year-old resident of Orange, New Jersey, admitted to collaborating with co-conspirators in fabricating bank statements and fake employee verification records for prospective property buyers, the U.S. Department of Justice said in a press release.
They also transferred funds into the buyers’ bank accounts as deposits for property purchases.
Furthermore, Simpson and his co-conspirators submitted fraudulent mortgage loan applications, along with forged supporting documents and closing paperwork on behalf of these buyers, inducing lenders to issue more than $1 million in loans, which subsequently led to defaults.
The defaults exposed both the lenders and the U.S. Department of Housing and Urban Development to losses exceeding $1 million.
Conspiracy to commit wire fraud carries a maximum penalty of 20 years in prison and a fine, which can be either $250,000, twice the gross profits derived from the scheme, or twice the gross loss suffered by the victims.
The post New Jersey real estate investor headed to prison for fraudulent mortgage scheme appeared first on The Real Deal.
Nobody said real estate development was easy, but some people can make it even harder.
In order for developers to move a project forward they need to secure the land where they intend to build, but tenants or homeowners sometimes have the leverage to flex their muscles. In some cases they’re looking for a better deal or to stay put.
“We say to developers that the only sure thing is a buyout,” Sherwin Belkin, founding partner at Belkin Burden Goldman, told The Real Deal in 2022. “Here’s your check. Goodbye. Don’t let the door hit you on the way out.”
There have been highly-publicized holdouts — like Edith Macefield, an octogenarian who refused to sell her Seattle home to a developer, so the project was built around her property. (And may have served as inspiration for Pixar’s movie “Up” in the process.)
In the early 1900s, Macy’s famously had its own brush with a holdout at its flagship location at West 34th Street and Broadway.
More recently, the Molinari-Martinelli family, owners of a property adjacent to Google’s Mountain View headquarters in California, ended its holdout with the company by leasing its land to allow for Google to move forward with expansion plans.
Likewise, there are currently several holdouts around the country that have caught the attention of news outlets for a variety of reasons. Here’s a closer look at some of the most newsworthy examples.
The not-so-underdog story
Joe Nastasi’s commercial building in Long Island City (Google Maps)
Sometimes David has a bit more leverage to keep Goliath at bay.
That’s the case of Joe Nastasi, the 70-something mechanic from Sicily who refused developers’ offers of millions of dollars, apartments and even having a skyscraper named after him if he agreed to budge from a three-story commercial building in Long Island City, the New York Times reported.
“What am I going to do with the money?” he told the outlet in 2021. “ I don’t need no money.”
Instead of taking $18 million and selling outright, Nastasi sold about 90,000 square feet of development rights, and he held onto the building.
“I got no mortgage, I don’t owe nothing to nobody,” he told the outlet “Why should I sell a gold mine?”
Success stories
215 West 84th Street (Google Maps)
In New York, holdout Ahmet Nejat Ozsu refused $30,000 from Naftali Group to vacate a Manhattan building the developer bought in 2021 for $70 million.
Ozsu said he wouldn’t leave, despite a $25 million lawsuit filed against him and an eviction notice. He even managed to live with an industrial air filter that was placed outside his apartment.
“It’s two things: I have the right to be here, and I have no place to go,” he told the New York Times.
Ozsu ultimately settled with Naftali, court records show. A confidentiality agreement precludes the parties from revealing how much the tenant got, but his attorney told The Real Deal it was enough for his client to buy a place.
He’s not the only one to score a sweet deal. In 2019, Tom Cherniak received $3 million to vacate his rent-stabilized apartment on the UES. The building was subsequently demolished and a 13-story building with retail and luxury apartments was built in its place, according to The New York Times.
Cherniak, the Times said, used the money to, among other things, buy a home with a pool in Connecticut.
The house that burned
2712 Cass in Detroit (Google Maps)
A ramshackle home in Detroit — near the Little Caesars arena — was owned by one of the last holdouts to the Ilitch organization, which had gobbled up most of the land near the venue. The 3,350-square-foot, eight-bedroom home, however, burned to the ground in 2022, the Detroit News reported.
The arena was finished in 2017, thanks in large part to the Ilitch organization spending $50 million buying dozens of properties at the beginning of the 2010s. Still, the organization was trying to buy up remaining parcels that had held out.
Where the heart is
Also in Michigan, a woman is holding out from selling her Ann Arbor home to the University of Michigan because the home has been in her family for years.
Julie Welch said her family put a lot into the home since it was purchased in 1962 and she wasn’t willing to sell.
The university is buying homes this year to make way for a $490 million residence hall that was scheduled to open in 2025, Michigan Live reported. The university authorized spending $75 million to buy nearly 50 properties for the project.
Welch, it appeared, was in it for the long haul.
“Build around me and let’s coexist in peace,” she told the outlet.
In Australia, a family declined selling their 5-acre property to a developer for $50 million, the New York Post reported.
“The fact that most people sold out years and years ago, these guys have held on. All credit to them,” Taylor Bredin, an agent with Ray White Quakers Hill, told a local TV outlet, according to the Post.
Sometimes Goliath has the upper hand
1651 First Avenue (Google Maps)
For years, holdout tenants prevented Extell Development from constructing a 22-story building with nearly 550 units and commercial space at 1651 First Avenue.
Gary Barnett, the Extell Development boss, planned to build an L-shaped development on First Avenue. But in April a state appellate court sided with his firm’s quest to evict a rent-regulated tenant at 1651 First Avenue.
The tenant, Gary Marshall, and other holdouts had caused Extell Development to design around their buildings. State officials repeatedly rejected Extell’s requests to deny its rent-regulated tenant a lease renewal so that it can demolish the building.
But in a unanimous September ruling, appellate judges found that the state Division of Housing and Community Renewal’s decision “was an error of law and was arbitrary and capricious.”
The court reinforced the ruling on Tuesday, denying the agency’s motion to reargue its case or to advance to the state’s highest court. Marshall and his attorney, Fred Seeman, said in April that they were not giving up.
“There’s miles and miles to go before we sleep,” Seeman said.
Hot in Cleveland
The property at the southeast corner of Detroit Avenue and West 25th Street (Google Maps)
Sometimes the virtue of patience pays off.
In 2022, the Port of Cleveland board of directors settled a longstanding dispute with the owners of a 0.4-acre parcel that held up a $100 million project to build a park, Cleveland.com reported.
Owners of the property — which was home to a hamburger joint — received $1.25 million after rejecting an initial offer of just over $350,000.
Tying up in litigation
Biscayne 21
Lawsuits seeking to evict tenants or terminate condominiums can be costly and time consuming. In Miami, ten unit owners are fighting Two Roads Development’s termination and planned demolition of their waterfront condo building in Miami’s Edgewater.
Two Roads said its affiliate is now the sole owner of the property, which the plaintiffs dispute.
The developer filed its termination plan last year, but does not yet own nine of the 192 units, though it is listed as the owner of the site on the property appraiser’s website. The unit owners who are trying to block the termination allege the developer-controlled association illegally amended the condo declaration to lower the requirement for termination to 80 percent of owners, from 100 percent, according to the complaint.
The post No means no: High-profile real estate holdouts keeping developers up at night appeared first on The Real Deal.
It was a wild news week in Miami — more so than usual, I promise.
On Monday, we started with the scoop revealing Lionel Messi’s purchase of a waterfront mansion in Fort Lauderdale.
And by Thursday, a commissioner and prominent land use attorney found themselves in jail (later released on bond). Miami city commissioner Alex Diaz de la Portilla was arrested on felony charges of bribery, money laundering, criminal conspiracy, official misconduct, failure to report a gift, accepting a campaign contribution in excess of legal limits and unlawful compensation or reward for official behavior.
Diaz de la Portilla, who allegedly slipped out of Miami City Hall following a commission meeting prior to his arrest, wasn’t alone. Lobbyist and attorney William Riley Jr. is also facing felony charges of bribery, money laundering, criminal conspiracy and unlawful compensation or reward for official behavior. (Gov. Ron DeSantis suspended Diaz de la Portilla from office late Friday.)
And, of course, it all ties back to real estate. In the arrest affidavit, the Florida Department of Law Enforcement outlines details of the alleged crimes and confirms our initial reporting tying the unnamed development mentioned in the initial press release to private school operators David and Leila Centner. Riley, the Centners’ lobbyist, directed $245,000 from the Centners to political action committees supporting the judicial campaign for Diaz de la Portilla’s brother, Renier, FDLE alleges.
This all allegedly occurred as the Centners were negotiating a no-bid deal to build a sports complex on the city’s Biscayne Park, located across the street from Centner Academy’s middle and high school campus. My colleague Francisco Alvarado delves into it here.
Remember, Diaz de la Portilla’s arrest follows other scandals at Miami City Hall, including the reveal of Mayor Francis Suarez’s side hustle for now-embattled developer Rishi Kapoor, one of a number of reasons real estate’s favorite mayor is under investigation.
Also, this summer, a jury found commissioner Joe Carollo guilty of violating the first amendment rights of real estate investors Bill Fuller and Martin Pinilla, earning them $63 million in damages following their five-year-long fight against Carollo. The commissioner waged an aggressive code enforcement campaign against their buildings and businesses in the historic Little Havana neighborhood.
What we’re thinking about: I keep asking this, but who is next? Send me a note at kk@therealdeal.com.
CLOSING TIME
Residential: Fausto Muñíz Patiño, a human resources mogul (such a thing exists) from Mexico, sold his Coconut Grove penthouse for a record $19.3 million. A Delaware entity purchased the lower penthouse unit in the south tower of Grove at Grand Bay.
Commercial: Ashcroft Capital paid $70.4 million for the 360-unit apartment complex at 4142 Cocoplum Circle in Coconut Creek. Advenur sold the nearly 33-acre property, which includes 45 two-story apartment buildings.
— Research by Adam Farence
Rama Raju Mantena with his oceanfront estate
NEW TO THE MARKET
The beachfront mansion at 1400 South Ocean Boulevard in Manalapan hit the market for $65 million, months after it sold for $48.4 million. Rama Raju Mantena, CEO of a health care company, and his wife Padmaja Mantena acquired the seven-bedroom, nine-and-a-half-bathroom estate in January. The 16,174-square-foot home, which sits on a 1.8-acre lot, is listed with Mark Griffin of One Sotheby’s International Realty. The property includes more than 200 feet on the ocean and another 200 feet on the Intracoastal Waterway, a dock and a separate guest house.
A thing we’ve learned
Around 1910, the late Frank Shutts brokered a land sale between the late John Collins and Carl Fisher that gave Fisher about 200 acres of oceanfront land and Collins the funds to complete a bridge connecting the mainland to the beach, according to the book “Bubble in the Sun,” which I am quickly working my way through. You may recognize Shutts’ name — he founded the law firm Shutts & Bowen and was publisher of the Miami Herald.
Elsewhere in Florida
Surfside commissioners bickered for hours at their meeting last week, which stretched until 2 a.m. The commission voted against commissioner Nelly Velazquez’s item that would have condemned the town’s planning and zoning board’s vote supporting Damac Development’s plan for the collapse site. The proposal drew ire from some because it included trash pickup next to the planned memorial.
Florida Gov. Ron DeSantis’ administration is advising Floridians under the age of 65 to not get the new Covid boosters from Pfizer and Moderna, in opposition to the Centers for Disease Control and Prevention’s recommendations, according to NBC.
Hurricane Idalia resulted in the spills and dumping of at least 26,000 gallons of primarily raw sewage into Tampa Bay and other parts of the state affected by the storm, the Orlando Sentinel reports.
The post The Weekly Dirt: Allegations of bribery, money laundering hit Miami City Hall appeared first on The Real Deal.
Another Lone Star State ranch has hit the market, this one in Hye, Texas.
The 260-acre Lonesome Valley Ranch, which is being marketed as perfect for off-the-grid living, has listed for $8.75 million, Culture Map Fort Worth reported.
David Murray of DMTX Realty Group has the listing.
This ranch, secured behind a gated entrance at 1430 Gibson-Best Road, includes a 1-acre pond and four fully furnished buildings.
The primary residence is a single-story home with three bedrooms and three bathrooms, along with wrap-around porches.
Nearby stands a two-story “barndominium” featuring a three-bedroom, three-bathroom bunkhouse and a saloon.
There is also a two-bedroom, one-bathroom cabin overlooking the pond that serves as a guest home.
The pond has a 40-foot pier and also features an anchored dock and a fountain.
Hidden amidst the woods is a versatile fourth building—an equipment barn and workshop, complete with a loft, apartment, and caretaker’s residence.
This ranch has a solar system, backup generators, a deep water well, 100,000 gallons of rainwater collection, and a 4,000-gallon propane capacity.
The property offers hunting opportunities due to the preservation of wooded areas and is enriched with wildlife. Outdoor amenities include an NBA-size basketball court, a tennis court, and a pickleball court.
According to its listing, the ranch could be used as an Airbnb rental, to host special events, or for corporate retreats.
Ranches in Texas have become hot commodities in recent years.
On the opposite end of the spectrum in terms of development, the 600-acre Rancho El Saeno, which has been owned by the same family since 1840, in south Texas was recently listed for $2.4 million by Foster Farm and Ranch, Chron reported.
JL Pepe Guerra is the listing agent.
The property’s lineage can be directly linked to the Texas Revolution. Elder B. Barton, a veteran of the Battle of San Jacinto, a crucial conflict in the revolution, received the land in recognition of his service in 1836. After the war, veterans like Barton were granted land parcels across the state, typically around 640 acres. Barton, who settled in South Texas, went on to have a large family and received various land grants. In 1840, he sold the Rancho El Saeno property to distant relatives, and it has remained in their possession ever since.
Unlike many properties in the area, Rancho El Saeno has never been cleared, allowing for the preservation of rare plant species, including the dragon fruit plant, palo verde tree, tenaza plant, and ocote.
Over the years, the ranch has served as a retreat for generations of hunters. With open land and an electric well filling ponds across the acreage, it provides an ideal habitat for deer, doves, turkey, and quail. While there is no traditional house on the property, it boasts a covered patio, fire pit, and a unique crystal blue swimming hole.
— Ted Glanzer
The post 260-acre Texas ranch is on sale for $8.75M appeared first on The Real Deal.
Two New Jersey construction company owners pleaded guilty last week in federal court to tax crimes.
In the first case, Salvatore Caravella, Jr. of Kinnelon, pleaded guilty to failing to report nearly $700,000 in income he received from his construction and real estate companies, including 2-C Construction Company Inc., Bella Construction of North Jersey LLC and 203 Harrison Street LLC, according to a press release from the U.S. Department of Justice.
Caravella’s conduct resulted in a tax loss of about $236,000. He faces a maximum of five years in prison, as well as restitution and penalties. .
No date was set for his sentencing.
In the second case, Zeki Donuk, of Landing, pleaded guilty to tax evasion, employment tax crimes, aiding the filing of false tax returns and making false statements in bankruptcy related to his business, Titan Builders, which later became Titan Steel Construction, according to a DOJ press release.
Between 2016 and 2019, Donuk personally cashed checks made out to Titan instead of depositing them into business’ bank accounts. Donuk hid the cashed checks and did not report them on either Titan’s corporate tax returns or as income on his or his wife’s personal returns.
As part of his plea, Donuk admitted that from the third quarter of 2016 through the third quarter of 2017, he also did not collect, account for or pay over to the IRS employment taxes withheld from employees’ wages. For those quarters, Donuk also did not file employment tax returns on behalf of the businesses, the release said.
In 2019, Donuk made false statements on documents he filed in a personal bankruptcy case. Specifically, he concealed from the bankruptcy court that he owned a vacation property in Pennsylvania, had signatory authority over certain bank accounts, owed tax debts to the IRS and operated his construction business as Titan Builders and Titan Steel.
Donuk’s sentencing is scheduled for Jan. 4, when he faces a maximum of five years in prison for each count of tax evasion, failure to account for and pay employment taxes and bankruptcy fraud, and a maximum penalty of three years in prison for each false return. He also faces restitution, and monetary penalties.
It’s been a busy couple of months for real estate crime in New Jersey.
Earlier in September, Cabral Simpson, a 46-year-old resident of Orange, New Jersey, admitted to collaborating with co-conspirators in fabricating bank statements and fake employee verification records for prospective property buyers, the U.S. Department of Justice said in a press release.
The post Two New Jersey construction company owners plead guilty to tax crimes appeared first on The Real Deal.
How bad is the office market in Boston?
Real estate firm Synergy Investments purchased One Liberty Square, a 13-story office building in the Financial District of downtown Boston, for $45 million, which is a 17 percent decrease from the building’s value a decade ago, the Boston Globe reported.
It’s the second office building sale in as many months in the city; Rhode Island-based Washington Trust provided the financing.
The acquisition, which is the second office building sale in as many months in the city, comes as Boston’s office market faces challenges due to the COVID-19 pandemic, with office space availability at an all-time high in Greater Boston.
“Class B” spaces, like One Liberty Square, which tend to be older and smaller, are currently on average 30 percent vacant, posing a significant drag on the market.
Despite the challenging market conditions, Synergy CEO David Greaney said he had confidence in the long-term value of office building.
“[But] it’s a really tricky time out there right now,” he told the outlet.
One Liberty Square, located at the intersection of Batterymarch, Kilby, and Water streets, is between 70 and 80 percent occupied, providing immediate cash flow. Synergy plans to invest in upgrades, including a conference room facility and a first-floor club room, the outlet reported.
The deal marks Boston’s largest office transaction in the past 18 months and reflects a reversal from pre-pandemic years when office building sales were brisk and prices were higher.
Boston is far from the only major metro area to experience a significant office market downturn.
Nearly a third of Portland’s office space is vacant, presenting a bleak outlook for the city’s commercial property sector.
The downtown skyline, once bustling with activity, is now dotted with skyscrapers facing the challenges of too few tenants and loans that are nearing maturity without the possibility of refinancing, Willamette Week reported.
Data from Colliers highlights that Portland’s office vacancy rate, including sublet space, reached 31.5 percent in Q2 2023 — higher than several other major U.S. cities, according to the outlet. Only San Francisco, with a 31.9 percent vacancy rate, was higher.
— Ted Glanzer
The post Boston office building sells at 17% discount, reflecting ongoing downturn appeared first on The Real Deal.
Compass Datacenters is hoping its latest purchase gives it a good life at a great price.
The Dallas-based firm bought Sears’ Chicago-area headquarters for $194 million, CoStar reported.
The 197-acre property, located at 3333 Beverly Road in Hoffman Estates, Illinois, has long been home to Sears’ massive 2.4-million-foot campus of interconnected buildings.
However, those buildings are slated for demolition to make way for high-powered data centers designed for cloud data storage, highlighting the trend of taking outdated corporate campuses and finding new purposes for them.
It’s also part of a broader nationwide trend driven by historically low office demand and an increasing need for data storage and logistics facilities. Dermody Properties is currently in the process of replacing Allstate’s former offices near Chicago with warehouses, the outlet reported.
In August, a Denver-based Vantage Data Centers proposed 1.7-million-square-foot campus, is projected to be located in Douglasville, the Atlanta Journal Constitution reported.
The Sears sale was facilitated by Colliers International brokers Suzanne Serino, Anne Dempsey, Jason Simon, and Dougal Jeppe on behalf of the seller.
Sears, once a retail giant, has been downsizing since its move to Hoffman Estates from the Sears Tower (now Willis Tower) in Chicago in 1992.
Transformco, Sears’ parent company, had been actively seeking a buyer for the property since late 2021.
Hoffman Estates officials formally announced the sale, shedding light on a transaction that had initially been reported by Crain’s Chicago Business in July but kept the price undisclosed until now. The $194 million sale was finalized on a recent Tuesday.
Compared to the $1 million-per-acre price Dermody paid for the former Allstate headquarters campus in Glenview, Illinois, this acquisition may seem like a relative bargain.
Compass Datacenters has yet to publicly unveil its specific plans for the site, but it’s clear that data centers are in the works, the outlet said.
The site’s transformation into data centers aligns with a trend in the region, as several companies have already established or are in the process of developing data centers in Hoffman Estates and nearby areas. While data centers may not create numerous jobs, the redevelopment is expected to generate substantial property tax revenue.
Hoffman Estates officials have amended zoning for the business park to allow data centers as a permitted use, making this transition easier. However, Compass Datacenters will still need site plan approval from the village.
— Ted Glanzer
The post Sears headquarters sold to Compass Datacenters for $194M appeared first on The Real Deal.
Technology stocks have powered the 2023 market rally—and become increasingly expensive in the process.