A developer, who wants to back out of plans to build luxury condos along Brooklyn’s Gowanus Canal if the feds designate the polluted waterway a toxic Superfund site, is being sued for failing to close on a $21 million deal for the private land needed.
Toll Brothers is refusing to pay $15 million it still owes on a 2004 sale agreement to buy former industrial land on Bond Street for its $400 million, 460-unit housing and retail project. It has said a Superfund designation would create an unfair stigma that would make the project unmarketable.
The suit by landowner Joseph Phillips and Citibank contends Toll Bros. was required to close on the deal shortly after the project received city approval last March for a needed zoning change.
But the developer had a change of heart about the project a month later when the US Environmental Protection Agency announced it wants to add the 1.8-mile canal – once dubbed “Lavender Lake” for its toxic-chemical hue – to the Superfund’s National Priorities List, so it could begin investigating the cause of the waterway’s contamination and determine how best to deal with it.
Phillips, however, contends in the suit that Toll Bros. should have done it’s homework before agreeing to the deal and that the Superfund issue isn’t his problem.
Toll Brothers has said it believes the city’s proposed cleanup for the waterway is far more practical. The city is trying to block Superfund designation.
Both Phillips’ lawyer and Toll Bros. declined to comment.
The news of the lawsuit, which was quietly filed in August, was first reported today by the blog Pardon Me For Asking. It also posted the 11-page document.
Toll Brothers filed a countersuit against Phillips in October.
The project calls for 130 of the 460 units to be marketed to low- to middle-income households, and the rest would go for market rate.
It was supposed to go up not far from where two other Gowanus-based developments were once proposed but are now not close to breaking ground because of the economic downturn.
This includes a 68,000-square-foot Whole Foods superstore proposed for Third Street and a mixed-use city project, “Public Place,” from Fifth Street south to Nelson Street, that was expected to bring 500 to 1,000 units of housing.
