Prime property causes dispute
A piece of prime property in New York's Hamptons, the summer getaway of financiers and Hollywood stars, has become the bitter subject of a land dispute between businessmen...
Goldman Sachs Banker Milton Berlinski and telecommunications entrepreneur Michael Hirtenstein, who together invested £15 million in the land, are being sued by their business partner according to a complaint filed in the US District Court.
The argument is over the boundaries of the beachfront 44 acre piece of land which is close to an estate owned by movie mogul Steven Spielberg.
The managing partner of the property venture, Marc Stanley Goldman, alleges that Berlinski and Hirtenstein refused to let him redraw the boundaries between their lots to accommodate a storm-water drainage easement required by the planning authorities, according to the complaint.
The property sits in Sagaponack, on the east end of Long Island, where houses command the highest price in the Hamptons. The median price there last year was £3 million.
Berlinski, Global Head of Goldman Sachs's financial sponsors group, confirmed the men cannot agree over the boundaries. 'We have a disagreement as to how much the lot lines should move over. We have suggested we go to binding arbitration and he has refused to do that,' he said.
The Hamptons property is one of only two large undeveloped parcels in Sagaponack. Nearby homes range in size from 1950s ranch-style houses to a sprawling limestone 'castle' built by Renco Metals Chairman Ira Rennert.
'This property won't go down in value no matter what happens,' said Judi Desiderio, chief executive officer of Town & Country Real Estate in East Hampton, New York. 'It's like buying a very rare diamond or piece of artwork that is irreplaceable,' she added.
Goldman, Berlinski and Hirtenstein jointly own the parcel at 451 Daniels Lane through a company called Sagaponack Realty LLC. Goldman bought the land in 2000 and in 2005 sold Berlinski and Hirtenstein each a one-third stake for £7 million apiece, according to the complaint.
The partners agreed to seek approval to divide the land into four lots, after which Berlinski and Hirtenstein could redeem their stakes for title to one oceanfront lot each.
But the Sagaponack Planning Board ruled that the subdivision must include a large easement for stormwater runoff because of potential flooding on the low-lying land. This affects the lots to be owned by Goldman and future construction.
He is seeking to resolve the dispute, reimbursement for attorney fees and other expenses for running the company, and unspecified damages stemming from breach of agreement.
Source: www.propertywire.com