It’s sink or swim time for the Pool House.
Six Sigma’s West Chelsea condo project that’s been treading water as its partners splashed about is heading for bankruptcy auction.
A federal bankruptcy judge in Manhattan last week gave the green light for the sale of the boutique conversion project — where each unit will include a pool — at 435 West 19th Street, court records show.
Court records show the project has a projected sellout of $55 million. The site’s secured creditors have claims against the property totaling $40 million.
The developer, headed by founder Jason Lee, first filed for bankruptcy in the summer of 2018 after his lenders, Soho-based Churchill Real Estate Holdings, filed to foreclose on the site.
Churchill principal Justin Ehrlich told The Real Deal his goal is to be made whole by the auction.
“We are just the lender. I hope we are paid off in full,” he said.
Lee could not be immediately reached for comment.
Churchill ousted Lee as developer of the project after filing a lawsuit in 2018 accusing him of skimming money off the project. The two sides settled the case in January 2019.
Meridian’s David Schechtman
In a separate case, Lee’s partners filed a lawsuit last summer accusing him of causing them “financially devastating harm.” The case is ongoing, though was put on hold as courts all but shut down amid the Covid pandemic.
David Schechtman of Meridian Investment Sales is conducting the auction.
An offering memorandum for the 19-unit, 35,500-square-foot project says it can expect sales of $2,000 per square foot.
Lee bought the property, a former office building, for $18.25 million in 2014. He hired Pei Partnership Architects, led by the sons of famed architect I. M. Pei, to design the condos.
Contact Rich Bockmann at rb@therealdeal.com or 908-415-5229