The new owner of a Rockaways property central to an ongoing city bribery case has taken out $59.5 million in bank loans against the site, according to city records.
Diamond National Investments, an Atlanta-based real estate investment firm co-founded by Menachem Mendel Chazanow and Max New, purchased 157 Beach 115th St. for $14.4 million in February 2024. Popular Bank approved two mortgages for the company, one for $38.9 million and another for $12.2 million, along with an agreement for $8.4 million.
The vacant lot’s previous owner faces accusations that he bribed a city official in 2021 and 2022 while seeking to develop the site. Mark Caller, CEO and co-founder of Marcal Group, who bought the property for $2.2 million in 2018, sought a speedy rezoning for the lot, District Attorney Alvin Bragg said. Caller allegedly offered Eric Ulrich, a Republican former City Council member from Queens who would go on to become buildings commissioner, a discounted beachfront apartment and other perks in exchange for preferential treatment in the development process, according to city officials.
Ulrich was named buildings commissioner in 2022. He resigned six months after assuming the post and is currently facing five separate indictments related to bribery and conspiracy. He did not respond to requests for comment.
Caller told Crain’s he could not comment on the specifics of his case, other than to say that it is a “cautionary tale” for any New York developer lobbying public officials in support of a development. After the indictment, he was unable to obtain the financing he needed to develop the site and was forced to sell, he said.
“While I’m not familiar with the project they are building, I’m sure it will be a far cry from what we planned,” Caller told Crain’s. His team sought a rezoning in order to build more than the allowed 188 units on the site. Initial plans included retail, office and parking space.
Benjamin Brafman, the attorney representing Caller, said the indictment has taken a “significant toll” on the real estate executive.
“He maintains that he did nothing wrong,” Brafman said. “I believe when all the facts come out, he will be completely vindicated.”
Caller has a court date June 26 to face the conspiracy and bribery charges. He has also developed the nearby OneSixteen residential complex and 1212 Seagirt Boulevard.
Diamond National Investments wants to build 188 luxury housing rentals on the site, where construction has begun. The 175,000-square-foot planned development is estimated to cost a total of $75 million, said Max New, co-founder and COO of the company. The current proposal includes a gym, a bike room, balconies and the potential for pickleball courts.
“Our property will be a great addition to the neighborhood and provide luxury housing and some commercial and amenities that I think will be fantastic,” New said.
Diamond’s leadership knows little about the bribery charges and has no connection to Caller, he said.
“I don’t know anything specific about what happened there,” New said. “I believe maybe we got a good deal because of that.”
