Agallas Equities, a Manhattan-based real estate firm, announced on Friday, March 28, the filing of a lawsuit against NYC Economic Development Corporation (EDC), 8th Regiment Partners LLC, a joint venture of Maddd Equities and Joy Construction, Bronx Borough President Vanessa Gibson and Deputy Bronx Borough President Janet Peguero over what it alleges was “the controversial selection” of a rival, chosen developer for the Kingsbridge Armory redevelopment project, as announced in January.

 

The documents filed in New York State Supreme Court allege “a troubling pattern of political interference, procedural violations, and apparent intellectual property theft that [allegedly] corrupted what should have been a fair and transparent [Request for Proposal (RFP)] public process” for the redevelopment of the City-owned Armory. An RFP is a business document that announces a project, describes it, and solicits bids from qualified contractors to complete it.

 

Manny Tavarez, managing partner of Agallas Equities, said, “This isn’t just about our company; it’s about proving that The Bronx won’t tolerate business-as-usual corruption. We will expose every backroom deal, every stolen idea, and every broken rule until justice is served and this community gets the development it truly deserves.”

 

Tavarez added, “Though Congressman Adriano Espaillat [NY-13] is not a respondent in the complaint, we are considering federal litigation to hold him accountable for his [alleged] direct involvement in [allegedly] corrupting the process. Our legal team is also evaluating moving to amend our filing to include NYC Councilmember Pierina Sanchez [C.D.14] as a respondent, based on new evidence of her [alleged] active role in subverting due process.”

 

According to Tavarez, the filed complaint, a copy of which has been received by Norwood News, reveals how, according to Agallas Equities, “EDC improperly awarded the project to 8th Regiment Partners LLC, a joint venture of Maddd Equities and Joy Construction, despite [alleged] glaring irregularities in the procurement process and compelling evidence that the winning team [allegedly] stole key elements of their proposal from rival bidder, Agallas Equities.”

 

According to Agallas, the firm’s lawsuit seeks to nullify the contract awarded to 8th Regiment Partners, compel disclosure of all records about the selection process, refer evidence of misconduct to city, state and federal law enforcement agencies, and award the project through a new, transparent process.

 

The firm’s representatives said key “revelations” in the lawsuit allege that “political favoritism tainted the process” and that Peguero [allegedly] “improperly participated in the process.”

 

The firm also alleges EDC broke its own rules by allegedly allowing Maddd Equities’ team to secretly revise its proposal after the submission deadline, and allegedly ignoring required scoring criteria to favor the applicant Agallas Equities describes as “the politically-connected bidder.” Agallas Equities went on to allege that EDC refused to release key records about the the Kingsbridge Armory winning bid selection, despite receiving FOIL [Freedom of Information Law] requests.

 

Agallas also alleges stolen intellectual property, alleging the winning proposal copies distinctive elements from Agallas’ plan including:

▪ an identical two-phase development approach;
▪ nearly identical event space design;
▪ identical programming, and
▪ “suspiciously similar” architectural renderings.

 

The firm also alleges a Maddd principal allegedly admitted his team had [devised] “no programming” [in preparing for their submission].

 

Christopher Carrion of Carrion Law Group, attorney for Agallas Equities, said, “This case exposes how political connections trump merit in New York City development deals. We’re sending a clear message that no one is above the law, not developers, not agencies, and certainly not elected officials who abuse their power.”

 

Asked if Agallas Equities had prior formal contact with the opposing legal parties to the lawsuit before the court filing, Tavarez said, “Yes.” Asked if, similarly, it had also had prior formal contact with Espaillat and Sanchez in relation to the situation, Tavarez said, “Absolutely, with both.”

 

According to EDC, its policy is “to provide equal opportunity for any business to compete for contracts using public funds, sourced, administered, or authorized by the City of New York.”

 

As reported, the latest two-phase, mixed-use plan for the long-vacant Armory was unveiled by City and State officials on Tuesday, Jan. 7, when 8th Regiment Partners LLC was named as a selected partner. NYC Mayor Eric Adams, New York Gov. Kathy Hochul, Espaillat, Gibson, Sanchez, and EDC President and CEO Andrew Kimball announced “El Centro Kingsbridge” (The Kingsbridge Center) as the name of the chosen redevelopment plan for the Kingsbridge Heights-based Armory.

 

They said at the time, “Phase One of the project envisions a vibrant, mixed-use development with a state-of-the-art event venue space, sports fields for local youth academies, cultural and commercial space, over 25,000 square-feet of dedicated community space, an educational facility focused on workforce development, and more.”

 

City officials said the latest proposal is designed to serve both the local community and the broader region and that programming is centered around the 180,000-square foot, column-free Drill Hall. They said the development team would lead the design and construction stages of the project, as well as the operation of the renovated Armory.

 

It came after the conclusion of the latest Armory RFP bidding process which kicked off in September 2023, and had a deadline for receipt of bids of mid-January 2024. According to government officials, submitted proposals were reviewed to assess which bidder best met the requirements of the community after a lengthy envisioning process for the historic and long-underutilized site, which spanned several months.

Officials went on to say in January, “Phase Two includes 450 units of permanently affordable rental housing adjacent to the armory,” adding that the redevelopment was expected to generate nearly $2.6 billion in economic impact over the next 30 years, creating over 3,000 construction jobs and 360 permanent jobs.

 

In November 2024, the mayor had announced that two Project Labor Agreements (PLAs) had been secured with NYC Building & Construction Trades Council (BCTC) for various, major City development projects, with more to follow including the Kingsbridge Armory. That announcement garnered positive feedback from Sandra Lobo, executive director of the Northwest Bronx Community & Clergy Coalition (NWBCCC).

 

In January, elected officials confirmed that the Armory redevelopment would indeed be carried out under a PLA, ensuring fair wages and benefits for construction workers. They said the environmental review was expected to begin this winter, and the uniform land use review procedure (ULURP) was anticipated to commence in mid-2025.

 

NWBCCC has campaigned over decades to ensure the armory’s redevelopment serves the local community and workers, both during and post-development and construction. After years of community advocacy, it even submitted its own redevelopment proposal as part of the latest RFP process.

 

Lobo, along with Sanchez, was a co-chair of the “Together for Kingsbridge” envisioning process and coalition behind the latest redevelopment of the Armory, located at West Kingsbridge Road and Jerome Avenue.

 

As reported, the latest RFP bidding process followed the failed Kingsbridge National Ice Center (KNIC) Armory proposal which fell through amid a legal dispute (not the first) over financing concerns at the end of the De Blasio administration in November 2021. As reported, the developer behind that proposal, KNIC Management, denied financing was an issue.

 

Meanwhile, Lobo offered her comments on the latest announced plan in January, saying in part, “We are glad to see the City has selected, at long last, a new plan for the transformation of the Kingsbridge Armory. While we are disappointed that our proposed project, “La Armería,” was not selected, we are eager to understand how the designated plan will meet the City’s Together for Kingsbridge vision.”

 

Back in 2013, as part of the prior redevelopment discussions on KNIC, NWBCCC had worked tirelessly to broker a historic, first-of-its-kind community benefits agreement (CBA) with the chosen developer for the now-abandoned KNIC project referenced above.

 

While the Armory’s protected status as a historical building, and the largest armory in the country, limits what it can be used for, that 2013 negotiated CBA included a promise of 50,000 square feet of space for community use, living wage jobs, local hiring and contracting, and local procurement and technical assistance for small local businesses. At least 51 percent of the resulting jobs were set to be filled by the local community under its terms.

 

After the City announced in late 2021 that the KNIC project wouldn’t be going ahead, NWBCCC, in conjunction with EDC, subsequently went back to the drawing board, and held numerous “Together for Kingsbridge” workshops to gather input from the community of what they wanted to see implemented instead of the ice center.

 

The final vision plan which, crucially, had the support of various elected officials, and which was based on the community’s feedback, was shared with prospective bidders/developers during the RFP process launched in September 2023, with a deadline of Jan. 18, 2024. The RFP process was boosted by the announcement of joint funding of $200 million from both the City and State governments in August 2023.

 

In addition to that $200 million, a further $2 million was pledged by the Bronx Borough President’s office, $12 million from Sanchez’s office, and a $1.05 million grant from the U.S. Department of Housing and Urban Development (HUD), with the support of Espaillat.

 

At the Bronx Community Board 7 (CB7) land use committee meeting in March 2024, Fernando Ortiz, Bronx borough manager with EDC, said the selected developer and project for the Armory were due to be announced by the end of 2024. The following month, as reported, a fire broke out at the Armory, apparently due to burning cables.

 

NWBCCC, a longtime key stakeholder in the process, had most recently proposed six recommendations for the Armory’s future use. Of the latest chosen development plan, Lobo said in January, “The City’s vision calls for a ‘redevelopment that creates quality jobs, supports career development, [and] elevates entrepreneurs.’ So far, there is only a general list of intended future uses for the Armory, without any concrete information on the programming or partners who will help bring it to life and meet these goals.”

 

She said this was of concern to those who, after 25 years, wanted the Armory finally transformed into an economic engine that prepares people for good-paying jobs of today and tomorrow, and maps a path for the power and capital generated by The Bronx to support The Bronx.

“We are convening a Coalition of Accountability made up of faith, community, labor, and small businesses that will continually monitor and advocate for a project that is transparent and genuinely invests in the community that surrounds it,” Lobo said. “The coalition will center its work around four areas: good jobs, community ownership, anti-displacement, and environmental standards. It will also pursue a legally binding Community Benefits Agreement that ensures these core priorities become a reality.”

 

She added, “The Armory must be rebuilt by workers who can be sure of their safety, and be home to good union jobs once construction is complete. Its activation cannot jeopardize the economic livelihood of the working people of the Bronx and accelerate the displacement of residents and businesses. We also seek to understand how the City’s Guiding Principle of community ownership will come to life.”

 

Lobo concluded, “This is the third attempt to develop the Armory, one that may finally be on the road to ‘[ensuring] this community gets the investment it deserves, while strengthening New York City’s economy,’ as the vision articulates. We will remain cautiously optimistic and proactive in our work to achieve this vision, ensuring that our community can withstand the pressures of gentrification and thrive amid the coming changes. Kingsbridge and the Bronx deserve nothing less.”

 

As reported, a rally was held on Jerome Avenue by East Kingsbridge Road in December 2023 amid concerns the commercial leases for small business owners operating in the vicinity of the Armory were at risk, as their landlords apparently began considering more lucrative offers in light of the impending Armory redevelopment.

 

Of the project announcement in January, Gabriella Madruga, principal at Maddd Equities, had said in part, “This is a wonderful example of a public-private partnership that will revitalize one of the most unique and historical buildings in New York.”

 

Norwood News reached out to EDC, Maddd Equities, Madruga, Joy Construction, the Office of the Bronx Borough President [for comment from both the borough president and the deputy borough president], Espaillat, and Sanchez for comment. We also reached out to NWBCCC for comment. We did not receive an immediate response. We will share any updates we receive.

 

Joy Construction has an address at Fulton Street in Manhattan, and Maddd Equities has an address on Long Island.

 

As reported, NWBCCC announced on its 50th anniversary a planned merger with the Bronx Cooperative Development Initiative (BCDI), a partnership expected to expand the two group’s collective reach across the entire borough.

According to the lawsuit documentation, EDC is a domestic public benefit corporation organized under the not-for-profit corporation law of the State of New York, with a principal place of business in Manhattan.

 

Editor’s Note: The headline for this story has since been updated to include a reference to the [chosen] developer, which has also been sued in addition to the EDC and the named Bronx politicians. Other background and supplementary details, for clarity, as well as additional responses to questions raised about the case, have also since been added.