A Manhattan Supreme Court judge ruled that Amalgamated Bank must resume funding the long stalled One Bennett Park condo project, which left an adjacent Hudson Heights area synagogue in ruins after the lender declared a default and cut off funding.
Supreme Court Justice Saliann Scarpulla, in a June 6 decision, ruled that Amalgamated wrongly cut off the construction financing for developer Rutherford Thompson. The halt in funding led to a loan default after contractors were not paid and mechanics liens were placed on the 23-story tower, located at 33-55 Overlook Terrace.
Scarpulla ruled that the bank was obligated to continue funding the project despite the mechanics liens and that Amalgamated must pay $32 million back to co-lender Petra Mortgage Capital, which helped finance the $95 million project under an inter-creditor agreement.
Developer Thompson, known as Ruddy, declined to elaborate how the ruling would impact the project, citing advice from his lawyer, but noted that the bank had hired a firm to keep the building permits up to date. He hoped a deal could be struck to get the project moving again.
“I’m just glad there’s finally been a decision and I’m glad it’s in my favor,” said Thompson, who said he considered himself friends with both lenders. “I just hope we work it out together. “
Amalgamated said it is studying the ruling, but said it plans to discuss the court’s decision with the other parties involved in the case.
“We are in the process of reviewing the judge’s decision, and look forward to working in partnership with stakeholders to ensure a beneficial outcome for all parties,” said Samantha Berg.
The project was one of the most visible symbols of the nation’s financial collapse in 2008, as a relatively new developer was stymied when he attempted a very ambitious and complicated project in an emerging neighborhood in upper Manhattan.
Thompson, a developer from Rye, N.Y., entered an agreement with Peter Bergmann, an attorney and trustee of the Ft. Tryon Jewish Center, at 524 Fort Washington Avenue. The deal called for Thompson to buy 39,000 square feet in air rights for $2 million, develop the condo project on land next to the synagogue and renovate the 1938 property so that an entrance to the condo could be completed on that same street.
The synagogue has remained empty and unfinished for five years since the renovation started. There were hints of a deal over the years that would get the project restarted, but those plans fell through.
According to court documents, Thompson allegedly failed to pay property taxes, insurance premiums or the loan by the June 30, 2009 maturity date. But the developer counterclaimed that his funds were shut off by the lender, starting in September 2008.
Petra, despite being the co-lender, had advanced more than $30 million of the project’s initial funding, and would share responsibility for another $40 million in loans, and therefore had an agreement with Amalgamated, guaranteeing repayment of funds to the bank.
“Petra is pleased that the court found that Petra has complied with all of its obligations in connection with this loan,” said attorney Todd Soloway, who is representing Petra in the case.
David Libchaber, a Corcoran associate broker and president of Ft Tryon Jewish Center, declined to comment.