KINGSBRIDGE HEIGHTS — Plans to build a $345 million state-of-the-art ice skating center at the Kingsbridge Armory have been frozen after the business partners behind the project had a falling out, DNAinfo New York has learned.
The city’s Economic Development Corporation has postponed signing a lease with the project developer, KNIC Partners LLC, after the firm splintered into two factions in February and one warring side later wrote a letter to the city about the split, according to representatives for each group.
The EDC is now conducting a "due diligence review" of the project, delaying it for at least a few months, according to a lawsuit filed Thursday by one of the former partners. One of the feuding sides also told DNAinfo that they have met with the EDC's inspector general, Lisa Kutlin, about the breakup.
The agency, however, told DNAinfo that it was moving forward.
"We are not seeking another due diligence period, and are advancing contract negotiations to move forward with this transformative project," EDC spokeswoman Kate Blumm said.
The imbroglio is the latest setback for the nearly century-old armory, whose redevelopment has eluded city officials for more than a decade.
Two previous plans for the 180,000-square-foot facility included transforming it into an entertainment and sports complex and a shopping mall. Both projects, one in 2000 and another in 2009, fell through.
In 2012 EDC accepted new proposals for the site, and in April 2013 Mayor Michael Bloomberg announced that the city had selected KNIC’s vision of an ice center with nine rinks and a seating capacity of 5,000.
Officials set a 2017 completion date for the project, which is expected to have a $1.3 billion economic impact on the area, with the developer promising to pay employees a living wage and to provide millions of dollars in funding and services to the Kingsbridge Heights community.
Kevin Parker, KNIC’s founder, is suing his former business partners, Jonathan Richter, Jeff Spiritos and Marcus Wignell, accusing them of wrongfully telling EDC that he does not have the experience or expertise to bring the project to fruition.
"[Parker] seeks to put an end to defendants' unlawful attempt to extort money from [Parker and KNIC] by interfering with the redevelopment of the armory and threatening destruction of KNIC's ice sports facilities business," the lawsuit filed in Bronx Supreme Court says.
Richter, Spiritos and Wignell also filed a lawsuit against Parker, a former Deutsche Bank executive, on May 22 in Manhattan Civil Supreme Court, accusing him of dumping them in February after their instrumental work in shepherding the ice-center proposal through the government approval process.
Ernest Badway, a lawyer for the trio, provided DNAinfo with the March 10 letter they sent to the EDC, which claims that Parker has no authority to act on behalf of KNIC.
"My clients have been wholly cooperative to EDC, indicating to them exactly what occurred and what happened," Badway said.
The letter says Richter, Spiritos and Wignell all have real estate backgrounds, but Parker does not. It also claims that their wrongful ousting will poison the goodwill they've generated with the community, lead to a legal battle and disrupt financing.
"Unfortunately, we now fear that Parker's actions are jeopardizing the successful development of the Kingsbridge National Ice Center," the letter says.
Both sides agree that the falling out began after the project cleared a key hurdle, winning approval from the City Council in December. But they differ on what caused the feud.
Parker says in his lawsuit that he is the visionary behind the project who spent $6 million of his own money and brought Richter, Spiritos and Wignell on board.
The lawsuit adds that in February Richter, who was serving of president of KNIC, made exorbitant demands, including a $450,000 annual salary and 10 percent equity stake in the company in exchange for a part-time role in the project.
Richter, a current Deutsche Bank executive, also asked that Spiritos and Wignell receive "equity grossly exceeding the market value for their services and are in excess of any prior proposal or discussion," according to the lawsuit. When Parker said no, Richter resigned and the other two later quit, the lawsuit says.
Parker says Richter then began calling city officials to tell them that the ice center project was dead.
The trio's letter also led deputy mayor Alicia Glen to pull out of a meeting with Parker, according to the lawsuit.
“The complaint seeks to have the court confirm what is widely known by everyone associated with the Kingsbridge National Ice Center — that Kevin Parker is not only the founder of this inspiring project but its most senior manager,” Parker's lawyer, William A. Brewer III, said in a statement.
The opposing side says that after Parker wrongfully let Richter go, he ousted Spiritos and Wignell when they didn't support his decision. The trio says in their lawsuit that Parker then told investors that Richter, Spiritos and Wignell were no longer part of the project and wrongfully claimed he was the sole member of KNIC.
When asked why the EDC's inspector general met with Richter, Spiritos and Wignell, their lawyer, Badway, said, "They're concerned about a $200 to $300 million project being stalled because somebody said they have an ability to do something and they don't."
The EDC would not respond to questions about the inspector general.