By Michael GryboskiMainline Church Editor Friday, 08 November 2024

A New York City-based congregation has filed a lawsuit against an Indiana-based Disciples of Christ organization, accusing it of refusing to provide a $7.3 million loan financing advance.

New York City’s La Hermosa Christian Church filed a complaint in June, alleging the Disciples Church Extension Fund failed to provide promised funds for a property development project.

The complaint, filed in the New York County Commerce Division of the New York State Supreme Court, alleged breach of contract and breach of an implied covenant of good faith. Indiana Lawyer last week.

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The Christian Post reached out to DCEF for this story, and a spokesperson responded Wednesday that the Fund “cannot comment or offer an opinion on litigation.”

However, a DCEF spokesperson provided CP with a copy of the Fund’s denial decision, which was submitted in August and is awaited.

In the motion, DCEF explained that it had advanced more than $11,000,000 to La Hermosa “since its inception,” but that the church “lost focus through no fault of DCEF.”

“Rather than displaying Christian values ​​as one would expect from a church plaintiff, LHCC seeks to navigate its own failures through baseless accusations and name-calling, and even misuse of the scriptures themselves,” the motion stated.

The motion went on to argue that La Hermosa was required to “enter into a purchase and sale agreement and/or a land lease and development agreement with a developer in accordance with the provisions adopted by DCEF.”

“Such an agreement, either as a full sale or as a joint venture with a developer, is necessary to finance and enable the construction of the building, which is the ultimate goal of pre-development expenditure,” the motion continued.

“Instead, seven years after starting this project, LHCC has completely failed to meet this requirement. Now facing a much softer real estate market due to rising construction costs and interest rates, LHCC still has no firm hope of finding a developer to develop the property .”

La Hermosa is represented by New York-based Blank Rome LLP. CP contacted the law firm but did not receive a response by press time. This article will be updated if a response is received.

La Hermosa was founded in 1938 and is known for serving the local Latino community, operating at its location near Manhattan’s Central Park since the 1960s.

In 2019, Manhattan Community Board 10 rejected a proposal to build a 33-story residential building on church property and denied multiple zoning change requests.

At issue, according to local officials, were questions about the affordability of the housing units and the church’s lack of a contractor to oversee the project.

“In the absence of a developer to approve project costs and/or profitability, and failure to comply with (Mandatory Inclusionary Housing) mandates at both the city and community level, constructing an on-site mixed-use facility in this area is both uncertain and ambitious,” as quoted by the community board in City Planning He read a letter he wrote to the Commission. He put the brakes on New York.

“While we commend the church for spearheading the process as a means of maintaining control, we struggle to imagine that an informed developer would accept the church’s financial terms and contracts without making any changes.”