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Allure demands lender pay $40M for Brooklyn nursing home

People & Companies / Latest News

United States of America

Mar 06 2017

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Kathryn Brenzel, The Real Deal

The Allure Group fired back against a lawsuit filed by its lender on a Brooklyn nursing home, claiming that the financial firm should pay $40 million for the property.

Allure, headed by Joel Landau, claims that the Sabre Group must pay $40 million for 270 Nostrand Avenue and an additional $6 million because the sale of the property didn’t close on time, according to documents filed in state Supreme Court. Allure, one of the developers at the center of the Rivington House scandal, maintains that “the express and unambiguous provisions” of the mortgage it received from Sabre require the Midtown firm to pay $40 million for the property.

A spokesperson for Sabre would only say that Allure has “been in default for quite some time and that’s why we’re pursuing our claims.”

Sabre sued Allure in December, accusing the company of failing to repay a $20 million loan it provided to acquire the Brooklyn nursing home. Allure purchased CABS Nursing Home in Bedford-Stuyvesant in 2015 for $15.5 million. Sabre claims that, under the terms of the mortgage, it can purchase the nursing home for $25 million because Allure defaulted.

But Allure alleges that because the property was vacant and had no pending litigation at the time that Sabr tried to act on its purchase right, the lender is on the hook for higher purchasing price. The landlord also claims that a liquidated damages provision in the mortgage requires Sabr to put $6 million toward the outstanding balance on its loan, since the financial firm failed to acquire the property after Allure repeatedly scheduled closing dates.

Landau declined to comment.

In December, the city admitted that it did not have a legal case against Allure, despite Mayor Bill de Blasio’s promise to sue the company for flipping 45 Rivington Street. Allure made $72 million when it sold the property to Slate Property Group. In April, New York state Attorney General Eric Schneiderman issued subpoenas after Allure filed demolition plans for the Nostrand property, with the intention of replacing it with a seven-story, 241-unit rental building.

The nursing home filed a lawsuit against Allure in December claiming the company marketed itself as a nursing home business while bidding for the property and instead forced residents out. The lawsuit also notes that the property flip may have led to the deaths of a few nursing home residents, who they say were forced out.

SOURCE: The Real Deal

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