After years of planning and development towards the intended restoration and conversion of Brooklyn’s historic Nassau Brewery, the Chapter 11 bankruptcy of managing company Nassau Brewing Company Landlord LLC is threatening to derail the project’s forward momentum, with the bankruptcy filing claiming that it is “stalled” from a number of issues.
Investor Churchill Real Estate instigated the filing, and now intends to “salvage the Project through a transparent sale process.” The property was originally purchased for $7.5 million by Crow Hill Development, and Yoel Goldman of All Year Management bought the Dean Street side of the property in 2014 for $17.5 million (with the Bergen Street property, containing the brewery, retained).
Despite listing between $10 million and $50 million in assets, the company also notes that it has between $10 million and $50 million in liabilities. Documents also stated that the company’s mortgages are now in default, and it has over $200,000 in real estate taxes.
The building was originally planned to be turned into a mixed-use space, with plans for upper-floor apartments, ground-floor retail, and a restaurant in the brewery’s original space. However, these plans have been flexible and shifted over time, as the intended use of the brewery’s original sub-cellar space has been different as plans have moved forward in development.
According to an April 2021 report from Brownstoner, a gastropub was intended for retail space on the property, and a Japanese restaurant called DOMO was hoping to open at the property at some point in late 2020.
Mismanagement resulted in dire financial situation, litigation
When the project was first announced, corporate managers spoke highly of the potential for the space.
“The historic nature of the old brewery buildings first attracted me to the site,” said former manager and building co-owner Fabian Friedland in 2015. “After a long wait, I’m truly thrilled to bring these buildings back to life. The Franklin Avenue corridor of Crown Heights is a vibrant place to be right now. And it’s exciting to have our project reinforce the existing architecture and character of the neighborhood.”
However, this vision was not enough to ensure that the project ran smoothly under its original management. As part of the bankruptcy declaration, company manager Sean Rucker notes that lender Churchill Real Estate Holdings LLC chose to remove Fabian Friedland from his position as the company’s initial manager on July 12, 2021, after “misappropriation of funds and other wrongdoing.”
“The decision to remove Friedland was one of necessity designed to end several years of fraud and mismanagement which has badly impacted [Nassau Brewing Company’s] development plans,” Rucker continued.
The filing claims that Friedland “mishandled construction funds such that the project was left in a state of partial completion,” as well as mismanaged funds provided by prospective tenants, and additionally lied to investors and created counterfeit corporate documents in order to conceal the company’s damaged financial condition.
The project is currently involved in litigation due to Friedland’s alleged mishandling of a security deposit from a prospective tenant, with Rucker noting that “a default judgment is imminent” after the tenant paid its security deposit and first month’s rent, but was not allowed to move into the space.