Fortis Property Group, developer of the luxury Olympia condo project in Dumbo, stands accused of playing games when it comes to the development’s finances.
A group that includes members of the Hakimian real estate family has sued Fortis for allegedly fraudulently inflating the value of portions of the 33-story mixed-use development in order to squeeze more money out of backers.
The suit, filed Wednesday in Manhattan’s state Supreme Court, specifically claims Fortis President Joel Kestenbaum “lied” to Shawn Hakimian and other investors about how much could be reaped from the sale of the building’s parking garage and community facility in order to get them to chip in nearly $6 million.
Kestenbaum also allegedly misrepresented that some of the residential units in the gray-toned and twisting high-rise, which is at 30 Front St. near the Brooklyn Bridge, were ready for habitation when a site tour about a year ago in fact revealed the opposite to be true.
“Plaintiffs visited the project and were appalled,” the court filing says. “The so-called ultra-luxury condominium units were unfinished, uninhabitable and filthy.”
The alleged problems included uninstalled sinks, missing moldings and broken smoke detectors, adds the suit, which does not seek specific damages but will allow the court to determine any amount due.
Fortis, which is also battling lawsuits over a 60-story condo tower in the Seaport District whose construction was halted after it was found to be leaning, has not yet filed a response to the charges.
But company spokesman Rich Bamberger dismissed the accusations as “pathetic.”
“The allegations in the court papers are baseless and false, and Fortis looks forward to achieving a complete vindication in court,” he told Crain’s.
The 21-page complaint, if true, presents an unflattering portrait of behind-the-scenes maneuvering at the project, which according to its offering plan should rake in sales of $406 million. But Olympia’s 76 apartments have been marketed since 2021, and the tower is only about 50% sold four years later, according to listings service StreetEasy.
The least-expensive unit now for sale at the tower, which began moving in residents in early 2023, is a one-bedroom for about $2 million.
According to the suit, Kestenbaum and Jonathan Landau, Fortis’ former CEO, initially pitched Hakimian and other investors about Olympia in a meeting at a Midtown office in 2019. At the time Fortis claimed the Olympia’s 375-space parking garage would fetch $50 million and its 75,000-square-foot community facility would go for $72 million, for a combined $122 million haul.
Based on that presentation, Hakimian, who is both the director of sales at the family firm The Hakimian Organization and also a managing partner of a spin-off investment group, North Point Capital, pledged $2.5 million.
Two years later Kestenbaum and Landau reassured Hakimian that the Olympia’s construction “was ahead of schedule, costs were under control and everything was proceeding without major complications,” the suit says. Hakimian chipped in an additional $3 million.
But in January 2024, three years after Hakimian had written that second check, the plaintiffs allegedly uncovered the unfinished units as well as debt problems with the project, leading Hakimian and others to conclude it to be “plagued by gross mismanagement, loan defaults, cost overruns and severe construction delays,” according to the suit.
Most critically, the garage and the community center were being shopped around for just $26 million, more than 80% below the amount first promised, which Hakimian calls part of a pattern of deceit. (Both spaces remain unsold, based on the register.)
It’s not clear exactly how many members of the Hakimian family are involved in the case, whose plaintiffs are technically four shell companies with complicated ownership structures. But the family and North Point have three people in common, and the firm’s phone number and the Hakimian Organization’s are one and the same.
Founded in 1970, the Hakimian Organization has completed 30 ground-up construction and conversion projects including condos, hotels and offices, its website says. For his part, Landau stepped down from Fortis in late 2022 to launch his own self-named development firm.
A phone message and email to Shawn Hakimian were not returned by press time, and emails to other firm executives also went unreturned. Also, Larry Hutcher, an attorney with Davidoff Hutcher & Citron representing the plaintiffs, did not respond to an email.
