One of Riverhead Resorts’ principals is facing a lawsuit in New York City in which 15 buyers of condo suites claim they were lied to about the number of units sold, according to a Wall Street Journal report Tuesday.
The lawsuit names as defendants Bayrock Group and the Sapir Organization, the developers of the Trump SoHo Hotel Condominium in Manhattan. Donald Trump and his children also are named as defendants, although their involvement is reportedly limited to a licensing and management agreement allowing the project to use the Trump name.
Bayrock Group owns half of Riverhead Resorts; Baldragon Homes, a Scottish development company, owns the other half. Bayrock Group is a Manhattan-based real estate development and investment company, which has done several projects around the country with the Trumps.
The lawsuit alleges that the condo developers at one point claimed that 60 percent of the 413 suites were sold, but that they later filed reports with the city indicating that only 15 percent had been sold. Condo unit owners are allowed to occupy them for only 120 days per year, and they are rented as hotel rooms the rest of the year, according to the Wall Street Journal article. The lawsuit reportedly was filed Monday. Donald Trump told the Journal that the hotel has done “exceedingly well” since it opened four months ago and that the lawsuit “is simply a matter of buyers’ remorse.”
Riverhead Town officials have said they will give Riverhead Resorts until Sept. 7 to pay nearly $4 million it owes the town in extension fees on their agreement to buy 755 acres of town-owned land in Calverton.