A top general contractor has locked horns with one of the city’s best-known high-end developers.
Leeding Builders Group, an affiliate of construction juggernaut AECOM Tishman, has sued condo builder Naftali Group for allegedly refusing to pay dozens of subcontractors between 2019 and 2022 for their efforts at The Benson, at 1045 Madison Ave. on the Upper East Side. The property is regarded as a real estate success story of the pandemic.
Specifically Leeding, which also goes by LBG, claims Naftali chairman Miki Naftali owes the firm $3 million plus interest and attorney fees for work done on the 15-unit building, which notched $238 million in sales by the time marketing wrapped up in 2022, according to the suit, which was filed Tuesday in Manhattan state Supreme Court.
“Owner seeks to squeeze for themselves [sic] even more profit out of the project—unfortunately, out of the pockets of LBG and [subcontractors such as electricians, plumbers and carpenters] who successfully performed the work and delivered a property of windfall value,” the suit says.
Naftali Group has not yet filed a legal response to the complaint, and a firm spokeswoman had no comment by press time, so it’s not known whether the unpaid bills, if true, stem from some kind of dispute over the work.
But the clash has cast a rare bit of negative attention on Naftali, which has been on a luxury development tear post-Covid, including launching sales at three New York projects at the end of 2024. This week the firm kicked off marketing at The Willow, a 19-story, 69-unit condo at 201 E. 23rd St. in Gramercy where one-bedrooms start at $1.2 million.
Naftali did however find itself in a stand-off for about two years over a holdout tenant at a building on West 84th Street on the Upper West Side, where the developer intended to construct a condo. But the tenant, Ahmet Ozsu, ultimately vacated his apartment in 2023 as part of a confidential court settlement, and Naftali’s The Henry, an 18-story, 45-unit offering that’s under construction there now, began sales in November.
According to LBG’s suit, the firm hired 40 subcontractors for the job and rushed to complete it by March 2022, as promised to Naftali. But the developer allegedly chose to retire $120.4 million in construction loans and other debt to Israeli lender Bank Hapoalim instead of paying invoices submitted by LBG, which apparently continued to send Naftali bills for months.
Starting in early 2022, “owner purposefully began a pattern of misconduct by which it failed and refused to approve, in whole or in part, LBG’s payment requisitions or to make payment upon submitted requisitions within the time required,” the suit alleges.
Since its founding in 2009, East 33rd Street-based LBG has had a hand in the construction of several prominent residential, hotel and industrial projects, including the High Line-adjacent 505 W. 19th St., Hell’s Kitchen’s Bloom at 500 W. 45th St. and Astoria’s Wildflower Studios at 35-15 19th Ave., according to its website.
AECOM Tishman, the result of a 2010 merger between two industry fixtures, is a multibillion-dollar national firm with a combined 900 million square feet of construction under its belt, its website says.
An attempt to reach LBG principal and co-founder Steve Socol at his office was unsuccessful by press time. And a message left for Richard De Palma, the attorney with Thompson Hine handling the case for LBG, did not return a call by press time.
