The development of The Benson luxury condo was a success for Miki Naftali, but a contractor is coming after the developer for millions of alleged unpaid wages.
AECOM Tishman affiliate Leeding Builders Group sued the developer in state Supreme Court, Crain’s reported. LBG alleges the Naftali Group failed to pay dozens of subcontractors who worked on the property at 1045 Madison Avenue in the Upper East Side between 2019 and 2022.
LBG claims Naftali owes the company $3 million, plus interest and attorney fees for work relating to the 15-unit property. Naftali allegedly hired 40 subcontractors for work, then prioritized retiring its debts to Israeli lender Bank Hapoalim rather than paying the subcontractors, according to the suit.
Early in 2022, Naftali “purposefully began a pattern of misconduct by which it failed and refused to approve, in whole or in part, LBG’s payment requisitions or to make payment upon submitted requisitions within the time required,” according to the complaint.
Naftali did not immediately file a legal response to the complaint. A spokesperson for the developer did not immediately respond to a request for comment from Crain’s. LBG principal Steven Socol could not be reached by the publication.
This is not the first dispute between contractor and developer.
Last year, LBG sued Naftali and Rockefeller Group, alleging the developers owed about $15 million for work on another Upper East Project, at 200 East 83rd Street. A lawyer for the developers pushed back, alleging the contractor failed to deliver work on time and abandoned the job, leaving the developers to complete the work.
Condos at the Benson hit the market in September 2020. Marketing concluded in 2022 with $238 million in sales, according to the lawsuit.
Despite the lawsuit, Naftali’s latest project is full steam ahead. This week, the developer launched marketing at Willow, a 19-story, 69-unit property at 201 East 23rd Street in Gramercy.
— Holden Walter-Warner