LA-based owner Markwood sues for $25M to protect Greenwich Village retail

Markwood Enterprises, a privately held real estate development firm founded by principals James and Robert Mehdizadeh, controls 25,000 square feet of retail in 67 East 11th Street, known as the Cast Iron Building, a residential and commercial cooperative.

Markwood alleges the co-op board is refusing to reissue shares of as it is allegedly obligated to do. It is suing the cooperative for $25 million or to complete the exchange as sought by Markwood.

According to the complaint, “Plaintiff is the tenant under eight commercial leases for a portion of the ground floor and the cellar floor of the Building (the “Leases”). The Leases were entered into on December 1, 1985, and will expire on July 8, 2025. Plaintiff sublets the commercial spaces to other commercial tenants who operate businesses at the Building, including the Defendant, as well as residents of the Building… Tenant shall have the option (but not the obligation) to surrender this Lease to the Apartment Corporation in even exchange for one or more new Proprietary Lease(s) and newly issued shares of the Apartment Corporation, to be issued to the Tenant or its designee at any time prior to the expiration of this Lease, subject to the terms and conditions which are set forth herein. This transaction is hereafter referred to as the “Exchange”.”

The sides battled in 1988 with the Markwood entity winning in federal court and a settlement being reached in several state court actions in December 1989 that included “valuable consideration paid to the Cooperative.”
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