EAST HARLEM — A nonprofit affordable housing developer is suing to block the sale of an apartment complex to a private developer — claiming it was cheated out of the deal by the building’s current owner, which tried to force the buyer to purchase two more properties to seal the deal, a lawsuit says.
Nuevo El Barrio Rehabilitación De Vivienda Y Economía (NERVE) claims it had the right to purchase the seven-story, 135-unit building at 1680 Madison Ave. in order to rehabilitate the property and turn it into low-income housing, says the suit filed Monday in state Supreme Court.
But after building owner Los Tres Unidos Associates received a competing offer, it told the nonprofit it would need to purchase a pair of unrelated properties in West Harlem in order to go through with the sale, the suit says.
NERVE, located at 18 E. 116th St., said it was notified by Los Tres on March 29 of the sale and told in writing that competing buyer L+M Development Partners also made an offer on the property. The nonprofit was also told it had 30 days to exercise its “right of first refusal,” a contractual agreement that would give NERVE first crack at negotiating a deal before a third-party is involved, according to the suit.
Roughly a month later, the nonprofit responded to Los Tres saying it would match L+M's offer. But Los Tres stated that NERVE would also had to purchase the two unrelated West Harlem properties for the sale to go through.
NERVE claims it swiftly rejected the offer, noting that the Right of First Refusal only pertained to the Madison Avenue building.
The suit notes that Los Tres is bound by the “same terms and conditions” in the offer presented to L+M and that the company “failed to provide any explanation for its position.”
NERVE is asking the judge block the sale of the property to L+M and give the nonprofit the chance to buy the 130,000-square-foot property, account to the suit.
Representatives for NERVE and Los Tres did not immediately respond to a request for comment, and a spokeswoman for L+M declined to comment.