Photo by Adi Talwar
A Bronx judge has thrown out a lawsuit filed by developers of the Kingsbridge National Ice Center against the city, effectively prolonging a redevelopment saga that’s dragged for nearly 20 years.
Bronx Supreme Court Judge Ruben Franco dismissed the lawsuit filed in March by Kingsbridge National Ice Center LLC (KNIC) against the city over claims the New York City Economic Development Corporation (EDC), the city’s real estate arm, had violated its contract by activating a lease for KNIC. The development firm also accused the city of conspiring against developers from moving forward with the project, a nine-rink ice center to be built at the Kingsbridge Armory. His decision indefinitely suspends a project. A representative for KNIC did not return calls for comment over whether it plans to appeal.
“It pains me to write this decision, for, as I have told the attorneys for both sides on numerous occasions, a decision by the court in this case, rather than a resolution by agreement of the parties, will almost certainly result in an appeal, which will only serve to further seriously delay the completions o fa much-anticipated development project which could greatly benefit the local community,” Franco wrote in his ruling.
Councilman Fernando Cabrera, the presiding Council Member whose district covers the Armory, broke the news to Community Board 7 members at its Dec. 20 general board meeting. Community Board 7 was also made aware of the judge’s decision the same day.
“Judge Franco’s ruling essentially allows the Kingsbridge Armory to move forward,” Cabrera said, via a statement. “The ruling appears to conform to the City’s position and I look forward to the development of this unique asset into a productive facility that meets our community’s needs.”
READ JUDGE RUBEN FRANCO’S RULING
The lawsuit was one of three cases circulating around the project. The dismissed lawsuit focused on whether KNIC can move forward in building the first phase of the project simply by having a loan commitment from New York State.
The Armory is owned by the city which had awarded a lease to KNIC LLC in April 2013, with the New York City Council signing off on it via a vote in December the same year. NYCEDC was handling the real estate transaction between KNIC and the city. It had placed the lease in escrow until KNIC showed it had the necessary $158 million funds for the first part of the project. KNIC has long stood by its argument that it has a $130 million loan commitment from the state and private foundations to fund the project. City lawyers said a pledge is not enough; actual funds needed to be presented. Judge Franco agreed.
“In considering the documents, the court determines that the Escrow Condition has not been satisfied,” Judge Franco wrote.
The news puts another dent in a contentious fight between developers and a city which, under a previous mayoral administration, had boosted the benefits of the project. Bronx Borough President Ruben Diaz Jr., perhaps one of the biggest supporters of the project, considered the project transformative for a borough on a continuous journey to redefining itself. The setback could cost Diaz politically, as he continues to mull a decision whether to run for higher office, framing his image as a legislator who helped usher a groundbreaking project to the Bronx.
The ruling also postpones a Community Benefits Agreement between developers and community stakeholders that’s valued at $99 million. Among the benefits was 50,000-square-feet of community space at the lower level of the landmark armory.
In a statement EDC spokesman Anthony Hogrebe opened the door for a possible resolution down the line. “EDC is committed to activating the Kingsbridge Armory for the people of the Bronx, and this decision brings us one step closer to delivering on that commitment,” Hogrebe said. He added the development firm should “stop wasting time on frivolous lawsuits and start securing the financing to get this project moving.”
“EDC is committed to activating the Kingsbridge Armory for the people of the Bronx, and this decision brings us one step closer to delivering on that commitment,” Hogrebe said.
EDC does have the option of removing KNIC as leaseholder and effectively restarting the redevelopment plan from the beginning via a Request for Proposal.
In a statement from John Desio, spokesman for Diaz, said the two parties “need to come together and make this project happen.”
“The community has waited too long and worked too hard to accept anything less. We hope that the mayor and his administration are sincere in their desire to move this project forward,” DeSio said.
Further Reading:
“KNIC to City: Let Us Buy Armory”-September 28, 2016
“Inquiring Photographer: Delay of the Kingsbridge National Ice Center”- July 12, 2016
“Kingsbridge Armory Faceoff Pits City Against Ice CenterDeveloper”- March, 30, 2016
“Editorial: The Politics of the Kingsbridge Armory”- February 4, 2016
“At Kingsbridge Armory Hearing, Rehashing Unresolved Worries” – January 21, 2016
“KNIC Secures State Loan to Jumpstart Ice Skating Center Project, But Meets With Hurdles”- December 28, 2015
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Welcome to the Norwood News, a bi-weekly community newspaper that primarily serves the northwest Bronx communities of Norwood, Bedford Park, Fordham and University Heights. Through our Breaking Bronx blog, we focus on news and information for those neighborhoods, but aim to cover as much Bronx-related news as possible. Founded in 1988 by Mosholu Preservation Corporation, a not-for-profit affiliate of Montefiore Medical Center, the Norwood News began as a monthly and grew to a bi-weekly in 1994. In September 2003 the paper expanded to cover University Heights and now covers all the neighborhoods of Community District 7. The Norwood News exists to foster communication among citizens and organizations and to be a tool for neighborhood development efforts. The Norwood News runs the Bronx Youth Journalism Heard, a journalism training program for Bronx high school students. As you navigate this website, please let us know if you discover any glitches or if you have any suggestions. We’d love to hear from you. You can send e-mails to norwoodnews@norwoodnews.org or call us anytime (718) 324-4998.
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Its been long understood within the real estate community that NO developer — let alone an inexperienced, first-time group even with bold faced names associated therewith — could EVER secure financing for a $350MM project (originally pitched at a cost of $275MM, and continuing to grow) to essentially build nine (9) ice hockey rinks. The dollars just don’t add up. The demand for ice time is strong, but not nearly strong enough to support that build-out. The cash flow will simply never be there to cover a mortgage now growing to $158MM. Wake-up, folks, check the math.
As the industry had expected, the developers are instead resulting to litigation and stall tactics with the end game of strong-arming the city into SELLING the asset. Let their be no misunderstanding, as incompetent as de Blasio’s administration has proven, they are also no fool to the developer hoping to buy a city’s prized asset on promises of “giving back to the community”. Ownership of the asset, as opposed to a leasehold, ensures far stronger interest from the lending community. If, for example, the business plan fails or the equity group goes under, the bank can reclaim title to the asset and sell it. Then the lender, or even the developer directly if its so inclined in violation of its CBA, could go ahead and revert it to its highest and best use…. A MALL, SELF STORAGE or A RESIDENTIAL APT/CONDO COMMUNITY.
The city should have selected a plan the community overwhelmingly endorsed, and whose numbers were proven throughout the bidding process to add-up to a viable project. https://www.youtube.com/watch?v=_lZ7os3hEnI
The community and the courts,have spoken
Turn the armory into something useful
A shelter for the poor and homeless,
With clean sleeping areas,
Hot food showers safety and a vendor that
Can serve,the poupulation and the community the bronx needs,to stand up
And take care of its,own
That’s not a secret. Everyone knows they couldn’t get a private loan. That’s also why they included the arena component. It’s up to the state really. But EDC should sell it to them if they want to buy it. The city is notoriously bad at managing its assets.
Not at all surprised that an old armory converted into 9 ice skating rinks didn’t happen. Who would have benefited from this? Certainly not the community. And if the community had a voice in this process, I’m sure a bunch of ice rinks is the last thing that would come to mind. Tired of all the lies and it is certainly an annoyance that after all this time, we are back to square one with this Armory. Just tear it down and turn it into housing. We know that’s what is going to happen anyway. We don’t need another storage facility.