A power struggle has emerged over the sale of a portfolio of 43 Detroit properties owned by late Midtown landlord and developer Joel Landy.
Landy’s trustee claims in a new lawsuit that his control over Landy’s prized wallet is being usurped by some members of a new Joel Landy foundation. The foundation is on track to receive future proceeds from the sale of the properties if a pending deal of more than $17 million is reached.
The eccentric Landy, who died in August 2020 at the age of 68, was a prominent landlord and redeveloper in the former Cass Corridor – now better known as Midtown – owning several city blocks, storefronts and apartment buildings, as well as vacant lots and former schools.
Landy, who was unmarried and had no children, left almost his entire estate to the new Joel Landy Foundation.
The foundation has three members, including prominent Huntington Bank executive Gary Torgow and his adult son, Elie Torgow. The eldest Torgow co-founded Detroit-based real estate firm The Sterling Group in the 1980s and passed the business on to his children in 2009. Elie Torgow is now Sterling Group’s chief executive.
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The lawsuit was filed late last week in Wayne County Circuit Court by Joseph Kopietz, who was Landy’s real estate attorney and is now a trustee of Landy’s trust.
Kopietz is suing the Joel Landy Foundation and Southfield-based commercial real estate firm Signature Associates, the listing agent for the Landy portfolio of properties.
The lawsuit claims the foundation improperly inserted itself into the process of selling the properties, despite having “absolutely no right to deal with the sale of the assets of the trust”. The foundation exists to use proceeds from the sale for its mission — to support automotive education and historic preservation in Detroit, causes dear to Landy’s heart — and not get involved in the sale process, according to the lawsuit.
“The foundation takes no responsibility until the money comes in, and the money comes in with the sale,” Kopietz’ attorney Steven Cohen of Cohen, Lerner & Rabinovitz said Wednesday.
Kopietz claims in the lawsuit that the foundation ordered Signature Associates to essentially exclude him from the sales process and not fully open the auction.
Kopietz said he believed early on that properties could fetch more money if sold individually. But at the request of the members of the foundation – whom Kopietz had chosen for the roles – he agreed to enter into an exclusive listing agreement in May with Signature Associates and attempt to sell the properties in a single package, ideally to a single buyer. .
Although Kopietz’s lawsuit does not identify the foundation members by name, it claims that “two members of the foundation are established real estate investors who may be in a conflict of interest due to their actions in secreting the process and apparently promoting a non-competitive bidding process for the entire portfolio.”
The lawsuit says Signature Associates President Steven Gordon severed contact with Kopietz in early August and, unbeknownst to Kopietz, began consulting directly with two members of the foundation about buyers. potential for the portfolio.
On August 10, Kovachevich forwarded Kopietz an email he had received from Signature Associates and told Kopietz that Gordon had demanded that he not speak with Kopietz because he (Kopietz) had “nothing to do with this agreement”.
“He honestly believes that the Torgows (sic) are the owners and the makers here. Wild,” Kovachevich told Kopietz in the email.
Elie Torgow did not respond to a voicemail seeking comment from him or Gary Torgow for this story on Wednesday. Gordon declined to comment. A lawyer for the foundation was not listed in the court documents.
The lawsuit says Kopietz was appalled that the foundation “inserted itself into a process in which it has no authority to be involved.” Taking matters into his own hands, Kopietz on Oct. 5 reached a new tentative deal for Landy’s portfolio with an affiliate of Kovachevich’s District Capital.
This latest deal is also around $17.5 million, according to Kopietz’ attorney Cohen, though it has different terms.
Kovachevich told the Free Press on Wednesday that he was unaware of the lawsuit and declined to comment on details of the agreements outlined in court documents.
He did, however, say he was interested in buying Landy’s portfolio of properties.
“I worked really hard to try to buy this,” he said. “I have a very strong interest in acquiring and trying to renovate these properties.”
The third director of the Joel Landy Foundation is Bob Baldori, who was Landy’s personal attorney and longtime friend. Baldori did not return a message seeking comment on Wednesday.
Kopietz is asking the court to declare that he, as trustee of Landy’s trust, has sole authority over the process of selling the properties. He is also seeking to have the listing agreement with Signature Associates declared null and void, including his potential brokerage commission of $700,000 for the sale of the properties.