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Sunday, August 8, 2010

Con Edison Can Block Ground Zero Mosque

The somewhat intrepid New York tabloid media is finally hitting some pay dirt on the ownership of the land on which Soho Properties desires to build a mosque, some hundreds of feet away from Ground Zero.  While Soho Properties represented that it owned two buildings, legally they only own one structure, and have merely a purchase option -- for an as-yet-undetermined price -- on the adjoining structure. (If you spot a neon awning for "Dakota Roadhouse," walk about thirty feet to the west and you'll be in front of the site in question.)  As the price in question has not been determined and could be subject to considerable negotiation, a deal is not certain; hence, mosque construction is far less certain. 
Moreover, lawyers for opponents will be thrilled to learn that the second building (the far more decrepit 45 Park Place) is owned by no other than Con Edison, a publicly traded utilty (NYSE ticker: ED).  This gives new avenues for opponents to attack, using all the tools of activist shareholders.  There can be issues and questions regarding fiduciary duties, proper valuation, and so on. 
Now some observations and inferences drawn from the various disparate facts that are emerging: 
Note that the one building (47 Park Place) that Soho Properties does own was before the Landmarks Preservation Commission for designation as a landmark since 1989 -- that's right, 21 years.  Also note that the current owner, Soho Properties, only bought the building in 2009. An adjoining building is one they must purchase for their plans, as detailed in the article.  (Walk by the site with a measuring tape.  These are narrow buildings on old plots and one commonly has to purchase multiple buildings just to have the space to develop any modern structure.) 
One suspects an as-yet-condition to the purchase may have been a back-channel -- and possibly illegal -- assurance from the City of New York that the LPC would deny landmark designation. Few intelligent investors spend millions of dollars to purchase a property if they cannot develop it without restriction.  If the City of New York (read: the Bloomberg administration) used its power and influence over the LPC to benefit a private party, might someone at the Department of Justice (or merely Manhattan District Attorney Cy Vance's office) be curious at taking a look at these arrangements?  After all, politicians who seek or dispense special favors to real estate developers could face criminal charges for bribery; just plug the name "Solomon Dwek" into your browser and search, or link to my January 2010 report on a huge New Jersey public corruption scandal).  At a minimum, even if such a practice did occur and is legal, it would bolster the claims by former New York City firefighter Tim Brown -- the plaintiff in the first civil case against the LPC -- that the LPC did not act in accordance with its customary procedures. 
It is worth noting that Vance is already looking at Bloomberg for his Independence Party payments in connection with a still-unfolding criminal investigation, one which has already led to charges against Bloomberg political operative John Haggerty.  (Haggerty, who appears to have been thrown under the bus, has pled not guilty and awaits trial.)
Heck, if all these events occurred in New Jersey a few years ago, wouldn't then U.S. Attorney Chris Christie (aka the next president of the United States) have convened a grand jury to investigate?
Eric Dixon is a New York lawyer and president of Eric Dixon LLC.  He is an investigative lawyer with substantial knowledge in corporate law, securities law and privacy law matters.  He can be reached at 917-696-2442 and for further comment.

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