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October 17, 2019Cart

Business

by Westchester County Business Journal
by WCBJ

Morris Builders says tainted title tanked Target project in Yonkers

Morris Builders has been trying to build a Target store for several years at the former Austin Avenue landfill in Yonkers, but its aim was repeatedly deflected by litigation over property rights.

So when Target Corp. backed out of the deal in April, Morris Builders blamed its title insurance companies for delays in fixing a defective land title.

Morris is demanding more than $2.7 million from Fidelity National Title Insurance, First American Title Insurance and Commonwealth Land Title Insurance companies, according to an amended complaint filed on Nov. 8 in a 2016 federal lawsuit charging breach of contract.

The insurance companies responded that it was Morris Builders that missed the mark, for instance, by not cooperating with their efforts to fix the mess.

Morris Builders, of Rutherford, New Jersey, has leased the Austin Avenue site since 1985, when it struck a deal with Westchester County, owner of 25 acres, the city of Yonkers, owner of 60 acres, and their industrial development agencies. The site is across the New York State Thruway from Westchester’s Ridge Hill.

The agreement originally envisioned an office park, but as the real estate market changed it was amended to allow a shopping center. The developer built stores for Stew Leonard’s, Costco and Home Depot. But since those retailers opened in 1999, nothing else has been built on the site.

The Target store was proposed about 16 years ago and a deal was formally signed in 2012. But unbeknownst to Morris, the lawsuit says, the land included a public park that had been improperly conveyed to the county.

Yonkers had designated land for Hogan Park in 1955. Nearly three decades later, in 1982, the city sold the parkland to the county.

The state Senate and Assembly allowed the city to abandon the park, but the law required the new owner to set aside at least one acre for green space and to immediately develop public amenities.

Disposing of parkland for other than park purposes must be authorized by the state Legislature, Morris said, so the property transactions between the city and county and Morris were tainted.

The developer notified the insurance companies that it planned to take legal action to fix the flawed property title, and it asked for compensation for attorney fees and losses.

The insurance companies said they would take “curative measures,” the lawsuit states, and they retained a law firm to represent Morris. But the developer chose to use its own law firm, citing a New York court decision that states an insured party is entitled to counsel of its own choosing.

Morris sued the county, city and the development agencies. Last year, they settled the dispute. The park issue was put to rest and Morris bought the property.

Then Target notified Morris in January that it wanted to terminate its lease. Negotiations continued, the lawsuit states, but by April 12 the deal was off.

Target terminated the deal because of the defective title, Morris claims, and because of delays by the insurance companies in fixing the title.

The insurance companies responded that the defective title was not the “proximate cause” of losing the Target lease.

Morris wants the insurance companies to cover its costs, including $944,411 in legal fees and expenses to fix the title, $1.8 million in rent damages, lost profits and other damages.