The Real Deal New York

Foreclosure looms for $45M loan on hotel conversion

August 11, 2009 05:30PM
By Adam Pincus

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A California-based bank has filed to foreclose on a $45.7 million acquisition loan made to a partnership that includes developers Jacob Chetrit and Charles Dayan, who planned to convert an 1883 office building near City Hall into a luxury hotel.
 
The partners bought the landmarked 10-story building at 5 Beekman Street at Nassau Street in March 2008 for $61 million, taking out the loan from Pacific National Bank at the same time, according to the foreclosure lawsuit filed by the lender August 4 in New York State Supreme Court.
 
The bank filed the foreclosure after the borrowers failed to make their July mortgage payment, the suit says.  
 
Chetrit, Dayan and the other partners planned to build a 200-room luxury hotel with a restaurant and bar, but the bank refused to fund the construction loan, according to a source familiar with the project.
 
The interior of the building has been demolished and prepared for construction, and some model rooms have even been built out, the source said, adding that they planned to hold on and develop the building.  
 
“The owners are trying to negotiate and would prefer not to fight it out” in court with the bank, the insider said.
 
Dayan declined to comment and Chetrit and an attorney for Pacific National did not respond to requests for comment.

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