A judge ruled Tuesday that a Syosset-based developer can proceed with a lawsuit arguing that Forest City Ratner Cos. illegally ousted them from a partnership agreement to build a retail and entertainment plaza next to the Nassau Coliseum.
State Supreme Court Justice Vito DeStefano denied nearly all claims filed by Forest City, which is asking the court to declare they are not partners with the Blumenfeld Development Group. Ratner is spending $260.5 million to redevelop the Coliseum and build a retail and entertainment center.
In his ruling, DeStefano found Ratner’s contention that there was never a final partnership agreement with Blumenfeld “contrary to events and circumstances” outlined in Blumenfeld’s complaint.
Blumenfeld attorney Ronald Rosenberg called the ruling “a wholesale rejection” of Ratner’s argument.”
Forest City spokesman Robert Leonard said the ruling “does not in any way prevent us from moving forward with the development of Nassau Coliseum or the surrounding retail.”
Blumenfeld and Forest City were among four companies that bid on the redevelopment of the Coliseum and its surrounding property in 2013. After Nassau settled on Forest City and the Madison Square Garden Company as finalists, Blumenfeld signed onto Ratner’s proposal, agreeing to develop the retail and restaurant components.
In August 2014, Ratner and Blumenfeld signed a memorandum of understanding — which expired four months later — signaling their intention to sign a formal agreement that would allow Blumenfeld to purchase a 50 percent interest in the retail space surrounding the arena.
Forest City argued in a March 2015 lawsuit that Blumenfeld’s “unilateral changes to the site plan, efforts to take control over the project, and its otherwise divisive manner of dealing with key constituents” caused the relationship between the firms to deteriorate.
Blumenfeld filed a counter suit, contending that Ratner engaged in an “unlawful and deceitful campaign to manufacture a series of false and misleading accusations” against the firm.
DeStefano Tuesday combined the two suits and directed the firms to appear for a conference on March 22.
Blumenfeld wants to build 300,000-square-feet of retail and restaurant space. Forest City is planning a 188,000-square-foot complex.
Construction of the entertainment plaza has yet to begin. Also, Ratner faced delays in signing a deal with labor unions to begin work on the arena, pushing back the start of construction from August to November. Nassau County Executive Edward Mangano has said the arena’s reopening could be pushed back from mid-December until early 2017.