Arch Companies alleges control of $64M in Sela Group assets in Brooklyn, Queens

UPDATED WITH COMMENT FROM SELA GROUP, 4:27 p.m. Sept. 18: Jeffrey Simpson’s Arch Companies obtained a measure of control over three properties acquired in 2019 by the Sela Group for $64 million in Brooklyn and Queens, according to city property documents filed yesterday. A representative for the Sela Group disputed the claim.

Arch Companies through the entity Ryerson 27th Lender LLC obtained control of 29 Ryerson Street and 256 Flushing Avenue in Clinton Hill and 39-35 27th Street in Long Island City, the filings said. The document was dated September 14, 2020, and was recorded on September 17, 2020. The document covers 3 parcels, including the tax class commercial real estate. The Brooklyn parcels have total development potential of 115,000 square feet.

Arch Companies has gained power of attorney and other powers over the properties, owned by Sela Group. The last time the Brooklyn properties sold was September 10, 2019, when Sela bought the Brooklyn properties for $55 million.  And on May 28, 2019, Sela bought 39-35 27th Street for $9.1 million.

The Sela Group said the lender did not have the right to file the document.

“Mr. Sela’s lender has engaged in misconduct by taking unilateral, unauthorized action by the recording of a “Memorandum of Restrictions” on the subject properties. Mr. Sela, on behalf of himself and his entities, has disputed the lender’s right to take such action and has informed the lender as much repeatedly in writing. Mr. Sela has and retains full and complete control over the properties and their operations and has no intention of relinquishing any such control to the lender,” Sela’s attorney, Christopher Gorman of the law firm Abrams, Fensterman, said.

Arch Companies is a real estate investment company. The signatory for Arch was Jeffrey Simpson, managing member.

According to the filing, “Pursuant to those certain Pledge and Security Agreements dated September 10, 2019, by and between the Owner and Declarant’s predecessor-in-interest the Declarant has exercised certain rights and remedies set forth therein and now has power of attorney of Owner as well as certain consent and/or approval right pertaining to the Membership Interests.”

Over the past five years, there have been 2 NYC Department of Buildings permit applications filed for this parcel valued at more than $20,000.There has been one new building permit application totaling 17,394 square feet. There has been one demolition project filed for the parcels over the past five years.
Direct link to Acris document. link
Direct link to the city’s interactive property map, ZOLA. link

Clarification: The story was updated with comment from Sela Group’s attorney, and citations noting the claims were made in property records were added. The headline was altered to include the word “alleges.”