ARE-East River Science Park, LLC v. New York City Health & Hospitals Corp.

The developer of a commercial life science facility along the East River in Manhattan filed a lawsuit in the federal district court for the Southern District of New York alleging that New York City Health and Hospitals Corporation (H+H) and New York City Economic Development Corporation (EDC) had engaged in a fraudulent scheme to induce the developer into committing to incorporate a floodwall into a new building’s foundation. The complaint alleged that the defendants had determined after Superstorm Sandy that it was “imperative” to construct the floodwall and that the developer had agreed to cooperate with the defendants to integrate the floodwall into the new building’s foundation. The developer alleged that H+H and EDC concealed from it that floodwall design criteria were not final, that construction of the facility would be delayed for years, and that the developer would not be reimbursed for its floodwall-related costs. The developer alleged that it had sustained tens of millions of dollars in damages and millions of dollars in lost profits and had been denied “the benefits and fruits of its contractual option.” The complaint asserted causes of action for fraudulent inducement or, alternatively, breach of contract.