Star­rett City part­ners sue to halt sale

New York Daily News - - NEWS - BY STEPHEN REX BROWN and GREG B. SMITH

TWO PART­NERS in Star­rett City, the Brook­lyn hous­ing com­plex co-owned by Pres­i­dent Trump, filed suit Thurs­day to stop the sale of the devel­op­ment, claim­ing the $880 mil­lion of­fer is be­low mar­ket rate.

The chil­dren of Disque Deane, an orig­i­nal Star­rett City in­vestor with Trump’s fam­ily, and an­other part­ner, Star­rett City Af­ford­able LP LLC, sued the man­ag­ing part­ners of the project, the big­gest fed­er­ally sub­si­dized hous­ing devel­op­ment in the na­tion.

On Sept. 6, the man­ag­ing part­ners, Star­rett City Inc., which is run by Deane’s third wife, Carol, an­nounced their in­tent to sell the 5,881-unit com­plex for $880 mil­lion.

Lim­ited part­ner SCA then made a counter-of­fer of $905 mil­lion that was re­jected.

On Thurs­day, Man­hat­tan Supreme Court Jus­tice Saliann Scarpulla de­nied the part­ners’ emer­gency re­quest to block the sale. The suit, how­ever, re­mains pend­ing.

“The process was ir­reg­u­lar, to say the least,” said Steven En­gel, lawyer for some of the share­hold­ers.

The suit claims the man­ag­ing part­ners “con­spired to sell Star­rett City for less than mar­ket value through an opaque, du­bi­ous and need­lessly ex­pe­dited process char­ac­ter­ized by con­flicts of in­ter­est, with­hold­ing of ma­te­rial in­for­ma­tion and mis­rep­re­sen­ta­tions.”

The suit does not tar­get Trump, who with his sib­lings is a lim­ited part­ner who owns about 16% of Star­rett City. Trump him­self holds a 4% stake that earned him $5 mil­lion last year.

The sale of Star­rett City, for­mally known as Spring Creek Tow­ers, re­quires ap­proval of fed­eral hous­ing of­fi­cials in the Trump ad­min­is­tra­tion. In 2009, the U.S. De­part­ment of Hous­ing and Ur­ban Devel­op­ment shot down one at­tempted sale, de­cid­ing it was be­ing sold for too lit­tle.

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