Ashkenazy buys AMC theater for $53M – Bromley Companies waged brief court battle over 2318 Broadway

BY: kandfllp- AS SEEN IN THE REAL DEAL ON June 20, 2018

By Kathryn Brenzel  – AS SEEN IN THE REAL DEAL

Kriss & Feuerstein LLP represented the Askenazy Acquisition Corporation in this transaction.

Ashkenazy Acquisition Corporation bought a movie theater on the Upper West side for $53 million, after the Bromley Companies attempted to block the sale.

The Midtown-based firm purchased 2318 Broadway from American Multi-Cinema, according to court documents and a source with knowledge of the sale. As part of the deal, AMC movie theater will lease the space back from Ashkenazy for an initial $3 million for the first year, with rent increasing 2 percent each year. The 15-year lease comes with an option to extend for two to 10 years, according to court documents.

The deal was momentarily held up by a lawsuit filed on May 10 by the Bromley Companies, the developer of the 306-unit condo building above the movie theater and other retail space. Bromley, which owns a parking garage adjacent to the theater, argued that it should’ve had first dibs on buying the movie theater. According to the complaint, Bromley had right of first offer under an easement agreement inked back in 1985.

An attorney for AMC, Andrew Morrison, declined to comment on the case, other than to say it was “paradigmatic” for how issues should be treated before the commercial division of the state Supreme Court — meaning, expeditiously. The court held a two-day trial eight days after the lawsuit was filed and delivered a decision four days later in AMC’s favor. Because the purchase was being made through a 1031 exchange, which has a 180-day deadline, the deal needed to close by June 18

Judge Barry Ostrager found that Bromley didn’t have the right of first offer on the sale, since it no longer owned the commercial condo unit to which the right was tied. The right of first offer also doesn’t apply to sales that involve a lease-back agreement, Ostrager wrote. Bromley filed an appeal to the decision but withdrew it on June 13.

When reached on Tuesday, an attorney for Bromley, Andrew Glenn, would only say that the case has been resolved. He wouldn’t comment further.

Cushman & Wakefield‘s Adam Spies, Kevin Donner and Hall Oster represented the seller.

Ashkenazy, which has a portfolio of office and retail real estate worth billions, and Saudi Prince Al-Waleed bin Talal, recently offered $600 million to buy out majority owner Subrata Roy from the Plaza Hotel. If they put up the deposit, the deal will close in late June, The Real Deal reported last month.

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