It’s been seven years since the members of the historic Young Israel synagogue inked a deal with a developer to construct a modern new temple on their Lower East Side property in exchange for allowing the remainder of the site to be turned into luxury condos. Tomorrow, a trial begins to determine how much one of the developers owes the congregation in damages on the failed project.
The 173-year-old building on famed Shtiebel Row was demolished four years ago, but the new building hasn’t materialized. The development deal has been tied up in an ugly court battle since April 2012, leaving Young Israel hosting services in temporary quarters and its future at 225 E. Broadway uncertain.
Conceived in the heady real estate climate of 2006, the ambitious project included a four-story temple valued at $6 million, as well as a cash payment of $3 million to the financially strapped synagogue, which was the first of the Young Israel movement and had made its home there since 1922. The developer planned to build about two dozen apartments on 10 floors above the synagogue in a separate residential space with its own entrance. As we reported in 2010, the developers blamed market forces for scuttling the plan, saying construction financing had evaporated in the wake of the financial collapse of 2007-08. At the time of our last story, both sides claimed to be attempting to renegotiate the deal. But last year, the synagogue went to court, seeking $10 million in damages by holding the principal developers responsible for the project’s demise.
“The defendants appear to believe that they can exploit the homeless congregation’s current perceived financial and other vulnerabilities to escape the contractual obligations they readily agreed to in a different economic climate,” the plaintiffs wrote in their complaint.
Under the terms of the deal, which was documented in public records, both Anthony Marano, a principal in Ozymandius Realty, and Elliot Gibber, who owns an egg company called Deb El Food Products and is active in the Upper West Side Jewish community, signed agreements making them personally responsible for ensuring the project was completed. Gibber’s wife Deborah co-signed with her husband.
After more than a year of legal skirmishing, Supreme Court Judge O. Peter Sherwood sided with the synagogue, ruling in June of this year that Young Israel was entitled to damages under the guaranties. Before the amount of damages was decided by the courts, however, the Gibbers then settled their part of the case for an undisclosed amount in October. The Gibbers’ attorney, Bernice Leber, declined comment on the settlement.
In the meantime, the dispute with Marano remains active, and a trial to determine a dollar amount is scheduled to begin tomorrow morning. Marano said late last week he has no intention of settling.
Marano, who handled the construction and financing side of the Young Israel project, says he believes the joint development agreement the parties struck seven years ago is still viable. He says he has reputable new investors he calls “white knights”standing ready to pour money into the project. He’d like to see the deal come to fruition for many reasons, not the least of which is the hope of recouping his own losses, which he counts in the six-figure range. The market rebound in recent months means the property is more valuable than ever, he said.
“We’re ready to go build them a synagogue,” Marano said. “Many of their members are in their 70’s; how long do they want to wait?”
Young Israel’s leadership clearly isn’t interested in doing business with Marano, however. Nussin Fogel, a member of Young Israel’s board of trustees, declined comment, saying the congregation would meet later this month to discuss its next steps in the wake of the court action concluding.
