Kruger scandal costs developer another project

Kruger scandal costs developer another project
Photo by Tom Callan

A deep-pocketed developer entrenched in an ambitious, federally funded plan to build the borough’s tallest building at Albee Square has been quietly thrown off the project for his involvement in the FBI’s sweeping bribery probe into state Sen. Carl Kruger.

Acadia Realty Trust, the builders behind the $750-million City Point project, which received $20 million in tax-exempt federal stimulus money when it suffered financial troubles in 2009, confirmed that developer Aaron Malinsky’s PA Associates has been “removed from all operational involvement” behind the plan to bring a four-story shopping mall and as many as 700 units of housing to the Fulton Mall.

Developers broke ground on the project in January after years of delays.

PA Associates is one three companies involved in the project. Acadia and Washington Square Partners have larger stakes in the construction, and, as a result, there will be no delay in completion, project officials said.

“Acadia would never have tolerated anything improper being done [to the City Point project],” project spokesman Rick Matthews said in a statement. “We have no knowledge of any improper or illegal activities related to Malinsky’s projects, but we have strong policies in place prohibiting illegal or unethical conduct by employees, associates or affiliates.”

As a result, Acadia shoved Malinsky aside after his alleged role in Kruger’s bribery scandal came to light.

The developer was arrested alongside Kruger (D–Mill Basin) and six others on March 10, and was charged with bribing Kruger and his lover Michael Turano with $472,500 over the years.

In return, Kruger:

• Tried to get Forest City Ratner Companies, the lead developer on the soon-to-be-built Four Sparrows Retail Center on the southern tip of Flatbush Avenue, to give a portion of the project to Malinsky so he could build a department store on the city-owned site.

• Promoted Malinsky’s plans to put a small-scale clothing store at Four Sparrows

Retail Center during a recent scoping session on the project.

• Greased the wheels so Malinsky could develop the $65-million Canarsie Plaza Shopping Center on city-owned land at the corner of Avenue D and Remsen Avenue.

The federal complaint doesn’t accuse Malinsky of any wrongdoing in either the City Point project or his plans to build a supermarket the size of the White House inside the Brooklyn Navy Yard. The Navy Yard hand-picked Malinsky to build the supermarket, but also quietly fired him last week when his arrest became public.

Malinsky’s attorney wouldn’t comment on his client’s ouster other to say, “There is a vast difference between making mere allegations and proving a case at trial.”

This is what the City Point Mall is supposed to look like — but developer Aaron Malinsky has been tossed in the Carl Kruger scandal.
Cook + Fox Architects