Wing Fung Chau sues California exec over Sunset Park EB-5 plan

Investor Wing Fung Chau, who also is known as Andy Chau, alleges a California real estate executive along with several affiliated EB-5 companies, failed to turn over millions of dollars raised for a mixed-use project planned for a large development site at 6200 8th Avenue in Sunset Park, Brooklyn.

Case 718139/2023

Control of the property started to shift in 2021, when a group including Watermark Capital Group and Maguire Capital Group, began to acquire control. Chau’s lawsuit says he still retains a stake in the new ownership structure. Watermark and Maguire are not parties to this suit, according to the court filings.

According to the complaint, the California executive in 2014 offered to raise money through EB-5 conduits, for a development at the large site. The complaint alleges approximately $80 million was raised for this project, but only $3 million was turned over. Chau alleges fraud, and other claims, because the $80 million was not directed to the project.

According to Chau’s complaint, “Due to Defendants’ breach of agreement, Plaintiffs lost over 6 years of opportunities to raise funds through other channels and suffered damage in an amount to be determined at trial but believed to be no less than $50,000,000.”

This property has been the location for at least nine lawsuits in the past two years. In addition, Wing Fung Chau has been named as a defendant in at least 20 New York State lawsuits over the past three years, according to a PincusCo record of court cases.

Court filings reflect the position of one party and are not necessarily accurate or complete.

The owner

The PincusCo database currently indicates that Watermark Capital Group owned at least 118 commercial properties with 1,410 residential units in New York City with 1,203,009 square feet and a city-determined market value of $226.9 million. (Market value is typically about 50% of actual value.) The portfolio has $52.8 million in debt, borrowed from Signature Bank and Bridge City Funding. Within the portfolio, the bulk, or 69 percent of the 1,203,009 square feet of built space are walkup properties, with elevator properties next occupying 25 percent of the space. The bulk, or 93 percent of the built space, is in Brooklyn, with Queens next at 7 percent of the space.

The surrounding

Within a 400-foot radius of 6224 8th Avenue, PincusCo identified one commercial real estate item of interests occurred over the past 24 months. It was a loan which Diversified Healthcare Trust borrowed $19.1 million from Wells Fargo and Bank of America secured by the 71,701-square-foot, three-unit industrial (I9) on 6300 8th Avenue and one other property on February 8, 2022.

Direct link to the property’s ACRIS page and link to DOB NOW portal.