Michael Stern Misses Payment In Brooklyn Tower Dispute

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Michael Stern’s legal fight with Larry Silverstein over Brooklyn’s tallest tower isn’t over.

Stern missed a court-ordered deadline to hand over a $2 million deposit to Silverstein’s Silverstein Capital Partners in an arbitration dispute tied to the supertall tower at 9 DeKalb Avenue, according to a petition filed Monday in state Supreme Court.

The filing stems from a 2024 agreement tied to Silverstein’s takeover of the supertall residential tower in Downtown Brooklyn that required Stern to reimburse the lender for certain costs. If he disputed the amount owed, he was required to submit a written explanation along with a $2 million deposit to be held in escrow while the dispute was resolved through arbitration, according to the filing.

Stern allegedly challenged Silverstein’s $11.8 million reimbursement demand but never posted the deposit. After a hearing, an arbitrator ordered Stern to pay the $2 million by June 25. Stern missed the deadline, leading Silverstein to petition the court to confirm the arbitration award and order him to pay it.

Stern and Silverstein declined to comment.

The filing is the latest chapter in a yearslong drama over the financing and eventual takeover of the tower. Stern began assembling the site in 2014, when he purchased a lot with Joseph Chetrit’s Chetrit Group. The following year, the pair bought the neighboring Dime Savings Bank for $90 million. JDS took full control of the project in 2018 when it bought out Chetrit for $60 million.

The developer locked down a $240 million mezzanine loan from Silverstein in 2019 as part of a $664 million debt package, including $424 million from Otera Capital. Silverstein later bought the senior loan from the Canadian lender.

JDS turned the tower over to Silverstein after defaulting on the mezzanine loan.

The lender filed to foreclose on the property, but the scheduled auction was called off after the two agreed to settle. A settlement agreement was supposed to resolve all outstanding disputes related to the property and loans.