Disaster at the Rushmore

OMG, 3 months without rent for a big developer. 30% unsold apartments until 2013. Horror! Since wealth in NY from real estate has always been a quick fask-buck game and there are no multi-generational real estate dynasties, THIS at the Rushmore is unheard of and horrible.

Well, I have to agree with Riversider. One doesn't invest in residential apartments to make money via rental. One can do better with certain high yielding stocks. I'm not sure rental income ever makes sense as a residential investment, unless one bought 15-20 years ago, and the rental income represents much higher returns. If you are buying to live there, the roi of rentals is besides the point. If you bought to flip, you're stupid. Visited friends there recently and found the place overrun with kids using the facilities -- playroom, the billiard room, the swimming pool. That indicates that the building will have stability and many of those buying intend to live there. As for taking 4.5 years, duh, what part of the economy has thrived since 2008? Manhattan real estate would be the envy of most other urban markets. At least this month.

All that said, does anyone have any real idea of the status of the lawsuit? Are there settlements happening quietly?

Just curious - did people ever get their deposits back from Extell or is this still going on?

Is it almost over?

http://therealdeal.com/newyork/articles/legal-fight-against-eric-schneiderman-over-rushmore-at-80-riverside-boulevard-owned-by-extell-development-and-the-carlyle-group-nears-finale

Attorney General Eric Schneiderman's office faced off with lawyers representing Extell Development and Carlyle Realty Partners yesterday as a Manhattan Supreme Court judge heard what may be the final arguments in a long-running effort to overturn a $16 million escrow dispute at the Rushmore condominium.

It won't be over until it goes to the Supreme Court. But 9% statutory interest ain't bad.

http://newyork.citybizlist.com/18/2011/10/5/Extell-Development%E2%80%99s-Luxury-Condominium-The-Rushmore-Reaches-Sales-Milestone.aspx

New York, NY -- Sales are continuing to climb at Extell Development's luxury condominium, The Rushmore, where 85% percent of the building's 271 homes have been sold. Thanks to a prosperous summer, the 43-story tower has continued to remain one of the Upper West Side​'s most popular locations.

I think Extell includes in the 85% the units for which they will need to refund deposits. It's a little misleading since they almost certainly will need to put those back on the market.

Perhaps, but in the end they will sell out over the next 6,12, certainly not more than 18 months and be done. The end result is they sold a fair number of units for 5-15% less than originally planned and took several years longer to get it done. The people who bought at discount, got a brand new apt in a great neighborhood(even if it's not really the Upper West Side) with river view and park and will not do worse than the market in terms of real estate appreciation. And then there's the abatement.

According to apt23, all of the owners of in Rushmore (along with other high end buildings) will be unloading their apartments when Greece Defaults, because Lance Bass says so.

downtown: i believe extell has sold some of the apartments that are at the center of the lawsuit. i believe the extell case centers on the fact that the owners didn't close, are not entitled to their deposits because they trumped up an excuse -- a detail about the closing dates or as some like to call it, contract law.

So why can't apt23 acknowledge that there is no disaster at the Rushmore?

Apt23 - the buyers sueing for the deposits back have won every hearing and case that has been heard or tried. My understanding is the final, final, final hearing, appeal (or whatever it is) was last week. Assuming no change in the outcome, those people will get their deposits back (and then Extell will need to reduce the total % they claim has been sold).

While the Rushmore has sold a good number of its apartments, I have serious doubts Extell made money (or will make money) on the deal. In fact, my guess is they lost a ton. The fact that it took years to sell (and they still haven't sold out) means Extell has been paying interest on the construction loan for far longer than it ever expected. Since the units took far longer than expected to sell, Extell was likely in default of its loan agreement and got hit with penalty interest. I have no inside knowledge and admit this is a presumption on my part, but it seems pretty clear to me. The sponsor always makes its money after the debtholders get paid and that profit comes on the last few units that get sold. The extra interest Extell had to pay (and continues to pay) likely ate up any profit that Extell would have earned.

None of that matters at all for the owners of the units. I agree the apartments are really nice and in a good location. My humble opinion is that they are not worth the price paid but that doesn't matter. I haven't heard of any major constructions issues so my guess is that everybody involved is happy, except probably Extell who likely lost money on the deal.

downtown1234 -- streeteasy has 224 sales recorded, and it is usually somewhat behind. With 271 total, they are certainly selling some of those involved in the lawsuit, and have for some time no doubt. Whether or not Extell made a profit is almost besides the point: they did not declare bankruptcy like so many on this board predicted for so long. With the 224 in sales, much of the loan has to have been paid off, and if the lenders did collect more vig, it was better for them than the alternative. Not screwing the banks is incredibly important in NY real estate, and Extell apparently has enough cred to find financing for the diamond building, the 90-story tower on W. 57th street. They did sell quite a few smaller deals over the last year, which also no doubt helped with cash flow/loan repayments. But all and all, I don't think Gary Barnett missed any meals, nor is he likely to. Remember: his initial defense in the lawsuits was (is?) that it was a typo....one that Stroop (law firm) missed. Soooo, if Barnett loses, expect Stroop's malpractice insurance to be on the hook.

mlwest - I didn't say Barnet or Extell were going to miss any meals. Barnet has made enough money on so many other deals that he can afford to loose money on this one (and probably a few others). As for financing, banks have a short memory. Look at all the private equity deals that were financed by banks that went bad - those PE firms are getting financing for new deals. My only point is that the Rushmore was almost certainly a money-loosing deal for Extell. Barnet and Extell are huge players in NY real estate and banks and others will still line up to do business with them.

Having said that, personally, I will never touch a condo in which Extell is a player. It's fine that they went to court and made the argument that the date in the offering plan was a typo - that was good business sense. However, to drag the process out for years by filing frivolous appeals after loosing every time, while 100% within their right, to me, is evidence of a type of company which i don't wish to do business.

Even if not eactly 90% , it is a success

http://online.wsj.com/article/SB10001424052970204632204577128760776948348.html?mod=googlenews_wsj

After years at the center of a battle between real-estate titans and community groups, condo sales at Riverside South, on the fringes of the Upper West Side, appear to have rebounded.

The Aldyn, a 40-story building on 63rd Street that launched sales less than a year ago, is now more than 50% sold, with 77 condos in contract at an average price of $1,485 a square foot, according to developer Extell Development Co.

The Rushmore, a 41-story condo on 64th Street that began sales in 2006, has 54 units in contract this year at an average price of $1,454 a square foot. The massive 271-unit project is now 90% sold.

Any idea when the courts are to rule again on the return of escrow monies? Or have deals been quietly made? Or has Extell simply been selling them out, claiming original buyers violated contracts. Interesting to see this finally played out.

State court ruled in favor of the purchasers. Ordered money returned, interest paid, legal fees covered. Extell has lost for the fourth time in their attempt to steal deposits from its customers.

Makes one wonder if there is any court in the country that would ever rule in favor of Rushmore.

So we're at 3-4 years now? At 9% statutory interest, that's a 30% return. All things considered, not bad for the peak-bubble buyers who should have been wiped out: they owe a big thanks to incompetence at first, and then idiocy, on the part of Extell.

Of course having the money circa 2009 to invest would've been better. But something tells me these buyers would have done something stupid (bought a condo or sat in cash) if they had the money circa-2009, so probably the best outcome for them.

After nearly three years of litigation in multiple venues, a state Supreme Court judge ruled last week that former Attorney General Andrew Cuomo was correct in his 2010 order for the return of $16 million in disputed escrow deposits at the Rushmore condominium.

Justice Anil Singh, in a 15-page decision, ordered co-developers Carlyle Realty Partners and Extell Development, to return the deposits to 40 buyers at the 80 Riverside Boulevard tower. Extell Development and Carlyle Realty Partners operate together as CRP/ Extell.

A spokesperson for Schneiderman said the office was reviewing the case, and did not have any immediate statement.

Ed Normand, a partner at Boies, Schiller and Flexner, which represents the developers in this case, said he would have to consult his client before commenting. Officials at Extell and Carlyle were not immediately available for comment.

Petitioner CRP/Extell Parcel I, L.P. ("CRP/Extell") challenges the determinations issued by respondent, the Attorney General of the State of New York, ordering petitioner to return $16 million dollars in down payments to the purchasers of forty condominium units in a new [*2]construction on the West Side of Manhattan.

Petitioner is the developer of The Rushmore, a newly constructed luxury condominium located at 80 Riverside Boulevard. The condominium development offering plan was made in 2006 and 2007. The co-respondents are individual condominium purchasers ("purchasers") who entered into agreements with petitioner to buy condos. CRP/Extell submitted its proposed plan to the Attorney General's Office on November 29, 2005. Thereafter, the Attorney General issued deficiency comments to the sponsor's outside counsel which is also the escrow agent in this matter, the law firm of Stroock & Stroock & Lavan LLP (hereinafter "Stroock"). The ongoing review process began, sets of revisions were submitted by petitioner's attorneys and the Attorney General reviewed and commented on such revisions.

On August 11, 2006, petitioner's plan was accepted for filing by the Attorney General's Office. CRP/Extell then began offering condominium units for sale.

Between 2006 and 2008, the forty individuals named as co-respondents in this proceeding entered into purchase agreements with petitioner. The purchase agreements incorporated by reference CRP/Extell's offering plan. The offering plan identified the commencement date for the first year of operations in the building. The projected first closing date was September 1, 2008.

In accordance with the agreements, purchasers tendered down payments to CRP/Extell. [*3]The down payments were all placed in escrow subject to 13 NYCRR section 20.3(o) in accordance with the offering plan.

The aggregate amount of the down payments paid by the purchasers is $16 million dollars. The properties are valued collectively at over $110 million dollars.

Section 20.3(o)(12) of the regulations required CRP/Extell to offer purchasers a right to rescind if the first closing in the building was delayed twelve (12) months beyond the anticipated commencement of the first year of operations. CRP/Extell was required, therefore, to offer purchasers a right to rescind if the first closing did not occur by September 1, 2009.

The offering plan contains a provision stating as follows:

It is anticipated that the First Closing will occur by the commencement date for the First Year of Condominium Operation as set forth in Schedule B which is September 1, 2008. If the First Closing does not occur by September 1, 2008, as such date may be extended by duly filed amendment to the Plan, Sponsor will amend the Plan to update the budget and to offer Purchasers the right to rescind their Agreements within fifteen (15) days after the presentation of the amendment disclosing the updated budget, and any Purchaser electing rescission will have their Deposits and any interest earned thereon returned.

It is undisputed that the offering plan was drafted by CRP/Extell's counsel. Petitioner contends that the attorney who drafted the offering plan erroneously typed an "8" (September 1, 2008) instead of a "9" (September 1, 2009) in the above provision.

There is a heavy presumption that a deliberately prepared and executed written instrument accurately reflects the true intention of the parties. To overcome this presumption and warrant a trial on a claim for reformation, the plaintiff must come forth with a high level of proof, free of contradiction or equivocation, that the instrument is not written as intended by both parties. The party seeking reformation bears the burden of proving by clear and convincing evidence that the instrument is not correct due to an error in the reduction of the agreement to writing, or that it was executed under mutual mistake or unilateral mistake coupled with fraud. This means that the plaintiff must show, in no uncertain terms, not only that mistake or fraud exists, but also exactly what the parties agreed upon, particularly if the negotiations were conducted by sophisticated, counseled people.

For the above reasons, the application to vacate the determination of the Attorney General's Office is denied, and the Article 78 proceeding is dismissed, and it is further

ORDERED that petitioner CRP/Extell Parcel I, L.P., and Stroock & Stroock & Lavan LLP, the escrow agent, are directed to release and return the down payments, together with any accumulated interest, to the individual purchasers within 30 days of receipt of this decision and order; and it is further

ORDERED that the respondent individual purchasers are awarded their costs and expenses in defending this proceeding.

http://blog.bluestonelawfirm.com/legal-malpractice-news-will-the-next-shoe-to-fall-be-a-legal-malpractice-case.html

While Rushmore is not a failure, it's not un-interesting that in six years they have still not sold out the entire project. I think its a fair guess that the sponsor originally anticipated in selling out every unit at or around the date of the first closing.

Rebuffing a developer's claim that one of its outside lawyers had botched a Manhattan condominium offering plan, a state judge has ordered the developer to return $16 million in down-payments.

The judge refused to reform the offering plan and purchasing agreement, and upheld the New York Attorney General's determination that the money should be returned. He directed the condo developer, CRP/Extell Parcel I, and Stoock & Stroock & Lavan, its outside counsel and escrow agent, to return the down payments, with accumulated interest and costs, within 30 days.

Justice Singh in his Jan. 19 decision said there was "no inconsistency whatsoever" between the offering plan and other documents.

Finding the current case distinguishable from case law that CRP/Extell sought to rely on, Justice Singh said, "The key fact in the instant matter is that there is no inconsistency whatsoever. The offering plan does not provide for a different rescission date than any other document."

Justice Singh said he had reviewed the attorney general's decision "very carefully" but could find no errors.

He added, "The 19-page administrative decision thoroughly analyzes petitioner's arguments regarding scrivener's error, mistake and reformation and accurately applies principles of New York contract law. The attorney general found that the provision in issue was unambiguous. We find such determinations entirely rational based on the record before us."

http://www.newyorklawjournal.com/PubArticleNY.jsp?id=1202539829275&slreturn=1

In reference to the post by Riversider, it amazes me people believe it was actually a mistake. It was not a mistake, they said that because that was the only thing they could think of. Not a single draft have a different date, and their argument that no developer would ever take less than the year rescission was proven false not once, but TWICE, by their OWN plans. Avery had six months, and when purchasers presented that evidence, they changed their argument to say "well, no one would EVER have the SAME date as the effective date". THEN, evidence was presented that the ALTAIR, again, an Extell development, had the day BEFORE the effective date. They simply lied about it being a mistake, and Stroock kept silent. When these plans were drafted, the market was going up, so their view was if someone took a rescission right, they could resell at a HIGHER price, and make more money. Their own greed and deception got the best of them.

Is this the same Rushmore?

http://sports.yahoo.com/blogs/mlb-big-league-stew/rod-sells-nyc-condo-considerable-profit-161618917.html

"The listing with Modlin Group says the property was posted for $8 million, so A-Rod is likely making a tidy profit after paying just $5.5 million for the five-bedroom place last February."

It comes off as fairly redicilous that Extell was arguing that for a Mulligan on the offering plan and to make the re-write binding. It's also strains credibility to believe that A-Rod ever intended on calling Rushomre home and that his buying it was nothing more than a marketing/publicity stunt. I wonder if this can be confirmed or proven.

The battle over $16 million in deposits between 40 condo buyers at The Rushmore and the project's developers, Extell Development Co. and Carlyle Realty Partners, rages on—and on, and on.

In an effort to avoid what would be the largest condo refund in New York history, the developers went to court Tuesday to attempt to overturn a 2010 decision by the New York state attorney general. He ordered the Rushmore's developers to refund the buyers' down payments on units at the Rushmore after the developers of the Upper West Side tower missed the deadline to close the sale of the units. The appeal was filed in the Appellate Division of the Supreme Court of the state of New York for the First Judicial Department on Feb. 14, according to a court filing.

"The appeal does not appear to have any merit. The purchasers will likely be successful, for the fifth time, in the Appellate Division,” said Marc Held of the law firm of Lazarowitz & Manganillo, who represents one of the buyers in this case. “Every court in this case has agreed that purchasers have a right to rely on the written terms of a contract and that the sponsor is responsible to comply with the very terms he unilaterally

Read more: http://www.crainsnewyork.com/article/20120215/REAL_ESTATE/120219933#ixzz1mXTD9eeg

Question, how does this affect the people living in these buildings?? Who takes a hit if they lose again...the developer or Rushmore (the building)?

Developer does. This has no impact on owners/residents.

Cuomo has rejected much of Albany’s backroom deals with developers for a decidedly pro-business approach. For instance, soon after assuming office, the governor formed 10 regional economic development councils that allowed counties to vie for public funding within a transparent forum. But at the same time Cuomo hasn’t been afraid to discipline developers that break the rules, helping to reach large settlements against Vantage Properties and releasing buyers from contracts with Extell Development

http://therealdeal.com/blog/2012/05/08/governor-cuomo-reforms-states-approach-to-real-estate/

Why did The Rushmore owners just get a 8x (yes -- eight times!!!!!!!! TAX INCREASE per month in August 2012?

It went off the mini-tax? When the initial tax is $200 per month, you can't divide off that base.

Not sure what it was based on. I don't know that divide off the base means. All I know is that owners were surprised by an 8 time increase and the abatement still has until 2020 so why would there be an eight time increase now?

Interesting question: Does Extell have a duty to disclose?
--------------
The co-developers of the Rushmore, a 289-unit luxury condominium on the Upper West Side are facing legal trouble yet again, according to Crain’s. Extell Development and Carlyle Realty Partners are being sued by Chris Bevilacqua, who has a unit under contract at the Rushmore, for breach of contract. Bevilacqua claims that information affecting the offering, such as previous lawsuits and administrative proceedings, was not disclosed. He is seeking the return of his $525,000 deposit plus an additional $5 million in punitive damages.

“Mr. Bevilacqua plans to hold the defendants and their principals accountable for the false and improper certifications made under the contract and offering plan as more particularly described in the lawsuit,” Marc Held of the Lazarowitz & Manganillo law firm, who is representing the plaintiff, said.

In 2010, the Rushmore, located at 80 Riverside Boulevard, was ordered by the court to refund 40 condo buyers a total of $16 million after missing a closing deadline – New York’s largest recorded refund. The developers claimed that the condo offering plan’s Sept. 1, 2008 deadline was a typo, and have since appealed the ruling four

http://therealdeal.com/blog/2012/08/21/carlyle-extell-face-yet-another-suit-at-the-rushmore/

Riversider - Not sure whether Extell had a duty to disclose, but what kind of broker (if any) and attorney did this guy hire who didn't mention it. Also, did the guy not do a simple google search on the building before spending millions of dollars? I think Extell are a bunch of sleaze bags and probably did have a duty to disclose, but this guy sounds like a an idiot (not to mention, it sounds like he hired terrible advisors).

downtown, The RealDeal story left something out

Two years ago, Mr. Bevilacqua attempted to get his deposit back on the unit under similar claims, but the attorney generals office denied his claims determining that "purchaser is not entitled to rescission because he released Sponsor from any such obligation when he entered into the agreement... Under New York law, a contract for the sale of real property that expressly provides that a seller may retain a down payment as liquidated damages is enforceable."

Read more: http://www.crainsnewyork.com/article/20120821/REAL_ESTATE/120829981#ixzz24HwDLpRM

Also I doubt most real estate lawyers do a Nexis Search when a client walks in with an intent to buy a condo. I'm guessing they just review the contract and make sure there are no objectionable terms. Buying an Condo & Coop typically dos not carry such due dilligence, but lawyers on this site feel free to chime in.

My point is that virtually anybody who pays even the slightest attention to real estate in NYC has heard about the the mess at the Rushmore.

Having said that, I do think that Extell had a duty to disclose any material litigation that could materially affect the condo.

Also, any reasonably intelligent person would do a simple google search of a property they are considering buying. I can't imagine paying millions of dollars for a condo at Rushmore and not typing in "80 Riverside Boulevard" into google and reading anything that looked a little relevant to the condo. .

I don't think the Rushmore has the duty to disclose something that can be discovered in a simple Google search. If it's in the papers then I feel it's already disclosed.
When I buy building our contracts make the seller affirm if there are any lawsuits.
I think this buyer is suing the wrong person. He needs to sue himself for not doing a google search and he needs to sue his attorney for not disclosing/discovering the issue.

So if IBM is doing a stock offering, must they disclose in the prospectus that they are under investigation by the DOJ or under anti-fraud investigation by Europe, or can they just assume that as an investor I can google the news stories. Personally I think they had a duty to disclose, but the Crains story says the buyer signed agreements negating that requirement.

Two years ago, Mr. Bevilacqua attempted to get his deposit back on the unit under similar claims, but the attorney generals office denied his claims determining that "purchaser is not entitled to rescission because he released Sponsor from any such obligation when he entered into the agreement...

Read more: http://www.crainsnewyork.com/article/20120821/REAL_ESTATE/120829981#ixzz24ODPzNNB

Extell ordered to pay judgment interest of 9% per annum since contract breach in September 2008. See Real Deal article

Street easy addict, can "Judgement Day" finally arrive?

It certainly raises the stakes for them. The buyers have won EVERY legal battle with Extell and this is another one.

Beat Down Again for Bad People!

Thieves!

Good Guys 5
Bad Guys 0

Law360, New York (December 11, 2012, 6:16 PM ET) -- A New York appeals court on Tuesday rejected a motion by attorneys for a joint venture between Carlyle Realty Partners and Extell Development Co. to reverse an affirmation of an order that they return $16 million in down payments for the Rushmore condominium building in Manhattan.

Carlyle and Extell had argued that Judge Anil C. Singh improperly rejected a request to vacate then-Attorney General Andrew Cuomo's 2010 refund order by refusing to consider additional evidence from a third party showing that the decision had been the...

A New York State appellate court ruled 5 to 0 that former Attorney General Andrew Cuomo correctly ordered refunds to 41 buyers at the Rushmore, a luxury condominium on Manhattan’s Upper West Side.

http://therealdeal.com/blog/2012/12/11/in-rushmore-case-judge-rejects-extell-carlyles-appeal/

These buyers who fought Gary Barnett and Extell all the way through years in the court system were wealthy individuals. Imagine all the small business men -- drycleaners, newspaper vendors, bodega owners who lost a weeks wages when Extell failed to secure the crane that collapsed during Hurricane Sandy on the One57 building for 8 days. I imagine that they will have to sue Barnett for damages. And I imagine, Barnett will fight those hard working people through the courts. I doubt that they will have the money to fight such a litigious, greedy SOB.

Nine percent interest hardly seems punitive. Since 2008, the stock market in up over 100%. Even conservative stocks like Disney are up over 40%. And virtually every stock broker in the country had their clients in Apple which soared to the stratosphere. So, these buyers are hardly well compensated for all their troubles and loss of income opportunities on their down payments. Does anyone know if Barnett has to pay their legal fees?

8781. IN RE CRP/EXTELL PARCEL I, L.P., pet-ap, v. ANDREW M. CUOMO, IN HIS CAPACITY AS THE ATTORNEY GENERAL FO THE STATE OF NEW YORK res-res — Boies, Schiller & Flexner LLP, Armonk (Edward J. Normand of counsel), for ap — Eric T. Schneiderman, Attorney General, New York (Lewis A. Polishook of counsel), for attorney general, res — Cohen & Coleman, LLP, New York (John A. Coleman, Jr., of counsel), for 3to4, LLC; Parker Bagley and Julie Baker; Bincube Partners; BRSP Realty, LLC; Christopher A. Chang and Maria Wu; Ona Colasante; Melinda Everett and Gerard Milligan; Jessica Faieta; Max Gilani; Kenneth Goodman and Andrea Economos; Kenneth Goodman and Lydia Goodman; Gary Huang and Evelyn Huang; Janice Huff-Dowdy and Warren Dowdy; Gyoo Gwan Kim and Su Jin Kim; Kyung Kim and Henry Myunghwan Kim; Melissa Ko and S. Douglas Hahn; Gail S. Landis and R. Victor Bernstein; Benjamin W. Lau and Judith T. Lau; Gregory Lee; Seung Moh Lee; Haley Lieberman Binn; Diane Lieberman and Lisa Ginsburg; Albert L. Marino and Beth F. Hinnen; Alan Meyers and Evelyn Meyers; Trevor Moran; Marla C. Muns and Kimberly McNesse; Mitchell E. Newman; Hyun Kyu Park and Doja Song; Shirley Romig and Nicholas Romig; Pauline Shender and Alex Shender; Han Soon Yom; and Pil Yoon and Young Yoon, res — Woods Lonergan, LLP, New York (James F. Woods of counsel), for Lola Gusman, res — Derryl Zimmerman, Bronx, for Mark Chu and Nancy Chan, res — Order and judgment (one paper), Supreme Court, New York County (Anil C. Singh, J.), entered January 25, 2012, which, among other things, denied the petition to annul the determinations of respondent Attorney General, directed the release and return of down payments made by respondent purchasers in connection with purchase agreements for condominium units, and dismissed this hybrid CPLR article 78 proceeding/ reformation action, unanimously affirmed, without costs.

The Attorney General's determinations were not affected by an error of law or arbitrary and capricious (CPLR 7803[3]; see Matter of Madison Park Owner LLC v. Schneiderman, 93 AD3d 555, 556 [1st Dept 2012]). Indeed, the Attorney General properly applied the common law in denying petitioner's claim for contract reformation based on an alleged scrivener's error (see e.g. Stonebridge Capital, LLC v. Nomura Intl. PLC, 68 AD3d 546, 548 [1st Dept 2009], lv denied 15 NY3d 735 [2010]).

The court properly denied discovery in connection with the CPLR article 78 proceeding, as the material petitioner sought to be discovered is neither material nor necessary to assess whether the Attorney General's determinations were affected by an error of law or arbitrary and capricious (see Matter of Levine v. Board of Estimate of City of N.Y., 143 AD2d 598, 599 [1st Dept 1988]). Nor was discovery required in connection with the claim for reformation, as the court properly dismissed the claim on the ground of collateral estoppel. Indeed, collateral estoppel bars petitioner from litigating the claim, as it was fully litigated before and decided by the Attorney General (see Ryan v. New York Tel. Co., 62 NY2d 494, 499-501 [1984]).

We have considered petitioner's remaining arguments and find them unavailing.

This constitutes the decision and order of the Supreme Court, Appellate Division, First Department.

Apt23, your statement presumes that these buyers would have bought stocks back then. Given their investment choice on Rushmore (upward momentum w/ crappy fundamental value), do you think they'd be buying stocks come March 2009 (downward momentum w/ great fundamental value)? Besides, their rescission date was Sept 1 2008, so their 44% interest beats the 22% SPY has done since then. All told, I think they will make out fine once Extell exhausts all its shenanigans.

This is a fun one. As one broker was suing for his deposit money back, he was collecting a ~$100K commission check for PH1A:

http://streeteasy.com/nyc/profile/deals/818964-trussgtcm

Must have been a bit awkward. The broker does a lot of transactions on RSB, but that's the only one in 80 RSB. Persona non grata?

Given their investment choice on Rushmore (upward momentum w/ crappy fundamental value), do you think they'd be buying stocks come March 2009 (downward momentum w/ great fundamental value)?

Very, very good point ino. That ol' dictum, You reap what you sow, will always come round to smack you upside the head.

Still, if anyone deserves to pay legal fees for the winner, it is Barnett.

Rushmore pricing came out of the gate at a premium to the neighboring Trump properties, although it was of roughly of similar quality. Unlike the older properties on the boulevard it had a full ten year tax abatement which should have justified the premium. The fact that the prices are down about about 10% from the offering plan after earlier falling 15% suggest a number of possibilities including questions about the quality of amenities , proximity to nearby projects or sponsor reputation from the lawsuits.

After battling for nearly four years, Extell Development Co., one of the city's most active developers, paid more than $15 million this week to dozens of would-be buyers who had backed out of condo-purchase contracts and demanded the return of their deposits.

A state judge ordered Extell to pay 9% interest usually applied in civil disputes. Extell is now appealing that ruling.

http://online.wsj.com/article/SB10001424127887323277504578191794211595964.html

http://en.wikipedia.org/wiki/Gary_Barnett_(real_estate_developer)
OUCH

Fun article:

http://www.forbes.com/sites/randalllane/2012/11/01/inside-extell-the-immoral-developer-behind-hurricane-sandys-dangling-crane/

"In my real-life dealings with Extell, in the process of trying to sell multimillion-dollar condos, they literally did take food from the mouths of orphans – 9/11 orphans."

This goes under WTF
--------------------------------

Lawyers for 40 buyers at the Rushmore condominium were awarded an injunction against the developers, after Stroock & Stroock & Lavan stopped payment on more than $15 million in escrow refunds. The buyers just recently received the payouts, on the heels of three years of litigation with the Extell Development and Carlyle Realty Partners.
But Stroock, the escrow agent and author of the offering plan at the Rushmore, sent an email to those buyers on Thursday, notifying them that the payments had been stopped and said it would seek the return of refunds already issued to buyers. “It has been called to our attention that, in light of the attached Feb. 22, 2012 stipulation among the parties, we have released certain escrow payments prior to the expiration of the agreed upon time for their release,” wrote Stroock attorney Bruce Schneider, in an email obtained by The Real Deal. “We have stopped payment on those checks still not paid.”

http://therealdeal.com/blog/2012/12/21/rushmores-escrow-agent-demands-buyers-return-15m-in-checks/

WTF indeed. Add in theft of personal financial info of the buyers..... cue the clown cars

http://therealdeal.com/blog/2012/11/20/at-rushmore-imposter-gains-access-to-escrow-accounts-information/

"fake employee got a copy of the master account statement, which contained the amount of the individual deposits and the last four digits of the buyers’ social security numbers or tax ID numbers."

Oh no, 4 last digits of your social security number. cue the falling sky.

"Andrew was with me every step of the way. He guided me on how to get my property ready for market, had the best photographers in to showcase it and planned a great marketing strategy. He continually showed my apartment. It sold it in a short time after being listed with another agency for 6 months." - Doris

Where did Andrew go? Why did he delete his post? Andrew, what makes you interested in the Rushmore when most of your transactions are in a very different part of town?

Far away from you, Ms. Cuntersburg.....................

The flippers of the 5-6m whole floor apts have done ok. 33CD is in contract, last ask 9m . Purchased for 5m.

It's funny to look at this "disaster". Nonetheless, the reason this building caught my attention is the number of current listings, though perhaps not unique, eg at 100 Riverside.