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A New York developer nabbed in the sweeping federal corruption probe that snared state Sen. Carl Kruger earlier this month has been quietly cut out of one of Brooklyn’s biggest projects, which was slated to bring the borough its tallest building, The Post has learned.
Aaron Malinsky’s PA Associates had been partnering in City Point, a mixed-use project slated to rise as high as 65 stories at the city-owned former Albee Square Mall site in Downtown Brooklyn.
But Acadia Realty Trust confirmed yesterday that it has used its powers as majority partner to remove Malinsky “from all operational involvement” in City Point.
Although Acadia spokesman Rick Matthews said Malinsky’s financial interest in the project “has not yet been unwound,” other sources close to the project said they expect PA Associates to agree to a buyout with Acadia so City Point can smoothly move forward.
It’s the second time in the past week that Malinsky was booted from a major city project following the corruption charges. A city entity overseeing the Brooklyn Navy Yard fired Malinsky as its developer for an on-site $60 million ShopRite supermarket.
In a March 11 filing with the Securities and Exchange Commission, Acadia said it would cooperate in the federal probe but reported “no knowledge of any improper or illegal activities” related to City Point and other projects over which it has partnered with Malinsky. The company also said it “certainly would never have tolerated anything improper being done” in relation to these projects.
City Point, a long-stalled $750 million residential and commercial space project, was hit hard by the national credit crunch and broke ground only last year after receiving a $20 million stimulus bailout from the federal government.
The first of City Point’s three phases — 50,000 square feet of new retail — is scheduled to be completed next year, and both the city and Acadia said they still expect the first phase to remain on track without delays. The timeline for the rest of the project, however, remains unclear.
Kruger (D-Brooklyn) and Malinsky were among eight men arrested March 10 in a government “pay-to-play” corruption scandal that allegedly netted Kruger more than $1 million in bribes over the past five years in exchange for political favors.
The feds say Malinsky funneled $472,500 in bribe money to Kruger through a shell company set up by Kruger’s lover and alleged accomplice, Michael Turano. In exchange, the feds say, Kruger assisted Malinsky in getting approvals to develop the $65 million Canarsie Plaza Shopping Center on city property and Kruger tried to get developer Forest City Ratner to give Malinsky a piece of a retail center Ratner is building on city land in Mill Basin.
Kruger even arranged a meeting with Forest City officials and Malinsky, the complaint says.
Calls left at Malinsky’s office were not returned.