Lawsuit aftermath
Men claim ownership stake in warehouse renovations
City officials are either keeping mum or supporting Saratoga’s top cop.
A legal battle is brewing over ownership of two prominent warehouse buildings poised to be converted into retail, commercial space and apartments in Albany’s burgeoning Warehouse District.
William Dorrough, a Halfmoon resident and owner of Dorrough Construction, and David Kwiat, an eye surgeon in Amsterdam, are seeking $23 million in compensatory and punitive damages from local developer Bill Barber, his wife Briana Barber and their limited liability companies, Nipper Apartments and 960 Broadway.
The two LLCS share the same address as Bill Barber’s Abar Construction business in Latham.
A lawsuit filed in Albany County Court Aug. 17 alleges the Barbers breached contracts with the two men, committed fraud, legal malpractice and negligence by failing to produce the proper paperwork demonstrating Dorrough and Kwiat’s ownership in the ventures.
The lawsuit asserts Dorrough is entitled to 25 percent interest in 960 Broadway, while Kwiat is entitled to 50 percent in Nipper Apartments after providing financing for the projects. The companies are
heading redevelopment of two buildings in Albany’s Warehouse District.
Attorneys Frank Putorti Jr. of Schenectady and Louis Lecce of Latham are representing Dorrough and Kwiat. They did not return calls for comment.
Albany attorney Stephen Rehfuss, who is representing Bill Barber, said the claims in the lawsuit are not substantiated.
“If you look at the complaint, there are all these allegations about joint contracts and ventures, but there isn’t a single written document attached as an exhibit to the complaint, or has been produced, which supports any of the claims made by the plaintiffs,” Rehfuss said. “That’s a huge issue.”
In 2016, Bill Barber revealed plans for a fourphase, $70 million development that would include more than 150 additional apartments in newly constructed buildings, plus retail space and at least two levels of indoor parking.
It would begin with a $15 million conversion of the “Nipper” building at 991 Broadway into about 75 apartments and 7,750 square feet of commercial space and a $6 million rehab of the former Rodgers Liquor Co. warehouse at 960 Broadway into a restaurant, commercial space and 24 apartments.
But Barber hit hard times financially while in the throes of the projects, falling behind on payments to subcontractors, defaulting on a business loan and facing civil judgments against him, as first reported by the Albany Business Review, which later reported on the lawsuit by Kwiat and Dorrough.
Some of those debts include an $875,000 civil judgment brought against 960 Broadway and 121 Brunswick in Troy by Nubar Sukljian and Loretta Sukljian, a lien for $195,000 brought by Dorrough Construction, and $35,404 owed in principal and late fees to Berkshire Bank for a business loan, according to Albany County records.
Rehfuss couldn’t comment on what the status of outstanding liens and judgments is but confirmed Barber received a $13.9 million “construction loan” from PCG, of Alpine, Utah, that helped clear some of the debt. While Stillwater Equity Partnerships — also of Alpine, Utah — features the Nipper building on its website, Rehfuss said 991 Broadway as well as 960 Broadway are still owned by the respective LLCS. What must be determined is who the members are, and what shares they have, he said.
City officials said progress on the projects continues despite the legal battle and they weren’t aware of any change in ownership.
Beyond the debate over ownership of the projects, Dorrough and Kwiat allege fraud, negligence and legal malpractice when Briana Barber served as their attorney — something Rehfuss said is false.
“Briana was not representing any of them on legal matters,” Rehfuss said.
Kwiat accuses the Barbers of forging his signature on various documents, including loan documents, along with the two using money Kwiat had provided as investment toward the projects for the Barbers’ own personal gain, according to the lawsuit.
“These defendants have diverted and secreted funds such that the plaintiff does not have an adequate remedy at law,” court documents read.
Counterclaims against the plaintiff will be filed within the week, Rehfuss said.
“You can’t use a threat of criminal prosecution to gain an advantage in a civil proceeding,” he said. “It’s unethical.”
Both projects received exemptions on mortgage recording and sales tax from the Albany City Industrial Development Agency, where the developers submitted documents showing Kwiat and Briana Barber as 50/50 owners of both LLCS.
A 485-A tax break from the city was sought for the projects, which is granted to certain commercial properties such as warehouses that are converted to mixed-use buildings with commercial and residential areas. The exemption came under scrutiny last year after city officials learned the break was improperly given out to some properties.
The warehouse would also receive a reduction in property taxes under the 485-A 12-year abatement program, with a 100 percent exemption on the incremental value of improvements during the first eight years, reduced by 20 percent in each of the next four years, until the full value is taxed in year 13.