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Appeals Court Rules to Dismiss Developer's Lawsuit over Waterfront Tower

By Allegra Hobbs | February 2, 2017 4:58pm
 JDS Development Group currently plans to build a 77-story tower at 247 Cherry St.
JDS Development Group currently plans to build a 77-story tower at 247 Cherry St.
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JDS Development Group

LOWER EAST SIDE — A state appeals court has ruled to dismiss a developer's claim that a waterfront parcel it had been slated to develop — now the future site of a 77-story tower from another developer — was unlawfully yanked from under them.

The court on Tuesday issued an order dismissing a complaint filed by Little Cherry LLC against Two Bridges Neighborhood Council and Settlement Housing Fund alleging the groups had broken a contract to sell the parcel at 247 Cherry St. to the developer for $4 million.

The ruling is the latest in a years-long legal battle over the contested waterfront property, where JDS Development Group is currently planning to build a residential skyscraper. 

The property owners initially had a deal with Little Cherry to build a 47-story building with apartments and retail, but had terminated that agreement when the developer didn't obtain the necessary city permits in time, according to court documents. Two Bridges and Settlement Housing then inked a deal with JDS.

Little Cherry filed a lawsuit in December 2014 alleging breach of contract among a host of other claims, which were tossed by Justice Jeffrey K. Oing in March 2016 in response to the defendants' motions to dismiss.

The breach of contract claims, however, were upheld by the judge — in the contract's clause pledging automatic termination if certain papers were not secured in time, it was unclear whether the overall contract would be terminated or just the existing development plans, the ruling states. 

But property owners appealed that decision, and on Tuesday the appeals court ruled in their favor, stating the entirety of Little Cherry's complaint should be dismissed because the plaintiff could not provide enough evidence that a contract had been breached.

The appeals court disagreed with the previous ruling that the contract was unclear, stating instead that it had "clearly and unambiguously" stated the groups would back out if the developer failed to get necessary city permits in time. The ruling also tossed the developer's claim that the property owners had caused the delay in acquiring permits.

A lawyer representing Two Bridges Neighborhood Council and Settlement Housing Fund called the ruling a "vindication" of his clients' continued claims they were not in breach of contract.

"We view the decision, our client views the decision, as a vindication of what they have been saying from the beginning — that there was no merit to the lawsuit, and the appellate division agreed," said attorney Mark Walfish.

But Little Cherry's attorney said the legal battle isn't over, and that he is currently planning the next step.

"The decision on Two Bridges' appeal...is not the end of the legal process," said Robert Tils. "We are currently reviewing the decision with our client, and we intend to do everything in our power to address this matter and to protect our client's rights."

Little Cherry has also filed a separate lawsuit against the JDS Development Group that accuses the developer of usurping their development rights to the property, which has not been resolved.