Updated at 5:15 p.m.
The developer of residential properties in the Northeast Washington neighborhood known as NoMa is suing his former partner, the Teachers Insurance and Annuity Association of America (TIAA), for $100 million, claiming TIAA abruptly stopped and removed him from the project.
According to the complaint (PDF), veteran metropolitan-area developer Ronald Cohen entered into a contract with TIAA to build a cluster of residential properties in NoMa. Cohen would handle the operations and TIAA would handle the financing, according to the complaint.
After the first phase of the project was finished, Cohen accused TIAA of suddenly removing him from the project in violation of their contract. Cohen originally filed suit in District of Columbia Superior Court on March 26, but TIAA filed to move the case to U.S. District Court for the District of Columbia yesterday.
NoMa is a relatively new moniker used to describe a neighborhood northeast of Washington’s Union Station. In the 1980s and 1990s, Cohen noted in his complaint, the area was mostly “vacant land, former industrial sites and old empty warehouses.”
In the mid-2000s, city officials created the NoMa Business Improvement District, hoping to attract developers with tax abatements. In 2006, according to the complaint, Cohen and TIAA teamed up to build several residential properties along a corridor of K Street in NoMa.
The first phase of the project, a 210-unit building called the Loree Grand, was finished in spring 2010 and “is considered one of the success stories within the NoMa community,” according to the complaint. There was a dispute between Cohen and TIAA in early 2011, but according to the complaint Cohen believed it was resolved.
Cohen and TIAA began working on the second phase of the project in 2011. According to the complaint, that project was slated to be a 525-unit apartment building with space for retail and parking. In February of this year, Cohen claims that his team sent a letter to TIAA asking for permission to move ahead with plans and financing for the second phase.
Later that day, Cohen alleged, TIAA replied that Cohen’s team did not have approval to proceed and later notified Cohen that TIAA was removing Cohen’s team as the manager of operations for the project. The two parties met later that month, but weren’t able to resolve whatever issues had caused TIAA to change the project management team. The complaint didn’t specify TIAA’s reasons.
Since then, the complaint claims, “no further progress has been made on Phase II.” Cohen is suing TIAA for breach of fiduciary duty, breach of contract, unjust enrichment and several other claims. He is asking for $100 million in compensatory damages, plus interest and other fees.
Cohen is being represented by Washington’s Dale Cooter of Cooter, Mangold, Deckelbaum & Karas. Cooter, in a phone interview today, said that he and Cohen “stand by the allegations as set forth in the complaint, and we look forward to resolution in the courts.”
A spokeswoman for TIAA, Abby Cohen, said Friday that "we believe the claims made in the suit are without merit and intend to vigorously defend ourself." Lead counsel for TIAA, Rebecca Woods of Seyfarth Shaw, declined to comment.
$100 million?
wow.. that is a lot of money.
Posted by: Rudy | April 29, 2012 at 12:32 AM