A real estate agent who says he was instrumental in one of Manhattan’s biggest land deals in years is suing one of the city’s biggest developers for an eight-figure sum.
Compass agent Austin Schuster is demanding $21 million from Extell Development for allegedly cutting him out of an 11th Avenue deal that, according to Schuster, could generate billions of dollars for the developer.
In the lawsuit, Schuster claims Extell contracted him to act as a finder and introduce the firm to the then-owner of the properties, and that he then “spent years fostering a relationship.”
“I’m extremely disappointed by what Extell is doing,” Schuster told The Real Deal. “I am confident in my heart the courts will see this and make it right.”
Extell responded that it “values the brokerage community and is careful to pay commissions it owes.”
The Manhattan parcel, between West 45th and West 46th streets, could allow for 500,000 square feet of residential development. It was central in a bitter foreclosure that earlier this year resulted in Extell taking possession of the land from Robert Gans.
Schuster claims Extell has made “nefarious attempts” to avoid paying him a finder’s fee for having introduced the two sides in 2015, and a $5 million commission Schuster claims he is owed because Gans’ portfolio went to Extell inside a 10-year window provided by the contract.
The rub is that Extell acquired the land in a foreclosure rather than a traditional sale.
That doesn’t matter, according to Schuster.
“[Extell’s] acquisition of this portfolio and the extraordinary financial windfall that resulted from it only happened based on Mr. Schuster’s introductions and his eight years of effort,” said his attorney, Matthew S. Blum. “There is a clear commission agreement underlying Mr. Schuster’s business relationship with Extell Development.”
Compass is not involved in the lawsuit. It has assigned the ability to pursue the commission to Schuster, meaning it will not take any payment or be liable for any expenses that Schuster incurs along the way.
Schuster’s $21 million demand is based on Extell’s ability to rezone a portion of the 11th Avenue parcel for residential use, which would make the site more valuable. However, rezonings must be approved by the City Council, which usually demands concessions and sometimes doesn’t rezone at all.
Read more
Commercial
New York
Carlyle ditches plans, sells LIC site for $49M
Residential
New York
These developers build the most homes in NYC
Development
New York
Judge tells Fortis, bank to end leaning-tower dispute
Gans, whose West Side portfolio included the Scores nightclub, had sued Extell and Eli Tabak’s Bluestone Group last year, accusing them of conspiring to get his property on the cheap by buying its debt and foreclosing.
Extell recently sold the former nightclub to Hamptons developer Silvera Properties.
Any talks between Extell and Gans about a straightforward sale did not come to fruition. When the pandemic sapped Gans’ businesses of cash, he became vulnerable to the owner of the sizable debt that his properties secured.