St. Francis College is accused of being Judas in a lawsuit brought by a real estate developer.
The Alexico Group signed a contract in April 2022 to purchase the school’s former campus at 180 Remson Street in Brooklyn Heights for $180 million. But Alexico claimed St. Francis stabbed the property in the back by selling the property to Rockrose Development for $160 million.
Alexico had previously held talks with CEO-run Rockrose Henry Elganayan Justin Elghanayan as a potential equity partner in the redevelopment project, and as part of those talks, Rockrose is said to have signed a non-disclosure agreement that prevents Rockrose from negotiating directly with St. Francis. The Academy also waived its right to accept competitive bids in its sale agreement with Alexico.
Alexico ultimately turned down Rockrose as a potential partner because the latter wanted to split the property in two, with one half being developed as luxury condominiums and the other half being developed as luxury rentals. Alexico wanted the entire development to be apartments and decided to proceed without Rockrose.
But the timetable for the sale to Alexico was complicated by the discovery that half of the campus had an 8-foot setback limit. This restriction dates back to the 1850’s and limits the property’s value.
Therefore, Alexico entered into discussions with Fidelity to provide title insurance for the entire property. A day before the scheduled March 30 delivery, Fidelity concluded that the entire property would not be insured. Shutdown is cancelled.
On March 31, St. Francis notified Alexico that it was terminating the agreement and announced a new all-cash deal with Rockrose on the same day. According to Alexico, the timing of this announcement strongly suggests that St. Francis and Rockrose had entered into negotiations well in advance of the closing date, which would constitute a default.
In the case of St. Francis, Alexico alleges that Alexico breached the contract by failing to complete the transaction by the mutually agreed closing date.
“Unfortunately [Alexico]St. Francis University has opted to pursue court action in its failure to close and in clear breach of its contractual obligations to acquire the college’s former campus. “Nevertheless, we remain confident in our position and legal position and we will resolve the matter in the appropriate forum at the appropriate time,” St. Francis said in a statement. “
Alexico is seeking one of two remedies — selling the property for $160 million or paying $10 million in damages and attorneys’ fees.
Neither Alexico nor Rockrose responded to requests for comment. Pincus The lawsuit was first reported.
