The Real Deal New York

Harch Group founder faces foreclosure suit at Renwick condo

October 01, 2010 06:45PM

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A rendering of the Renwick

Nearly two years after defaulting at the Jasper condominium, Harch Group’s founder, Harry Jeremias, is facing a foreclosure lawsuit from U.S. Bancorp for allegedly defaulting on a $55.3 million loan to develop the Renwick condominium in Soho.

U.S. Bancorp, in a Sept. 14 lawsuit filed in New York State Supreme Court, claims that it agreed in August 2007 to loan the money to Jeremias and Harch for the Renwick, a 44-unit condo at 15 Renwick Street, which stalled out.

The lender says that after advancing $24.1 million to Harch, the loan fell “out of balance,” meaning the outstanding balance of the loan was insufficient to complete the project; therefore, U.S. Bancorp demanded a $1 million to bring the loan back into balance, according to the complaint.

The complaint says that Harch continued to operate in a default situation by failing to pay the following: monthly debt service, outstanding mechanics liens, taxes and insurance on the property. PropertyShark.com lists mechanics liens from more than 10 contractors dating back to 2008.

By August 2009, the lender notified Jeremias and the other guarantors, which include Harch partners Henry Orlinsky and Francisco Pujol, that the loan was being accelerated and became fully due. The lender previously filed for a judgment in lieu of complaint against the developers, but that was later rejected by Judge Emily Goodman, so the lender has now filed suit to foreclose on the properties.

The lender claims that the developers also defaulted by allowing the project budget to go $6 million out of balance and that the project fell more than 12 months behind schedule after construction was halted.

The bank is now demanding the remaining principal balance of $28 million, plus interest, taxes and fees.

The foreclosure case follows a series of lawsuits against the developer over this project. Brooklyn-based Kiska Development Group, in October 2009, filed suit in state Supreme Court against Harch, alleging that it wasn’t paid for construction work at 15 Renwick.

The contractor was later told, however, that the bank never approved the firm to perform the work, and filed suit to foreclose on a $384,000 lien. Peter Kutil, attorney for Kiska, was not immediately available for comment.

Records from the city Department of Buildings show a partial stop work order in February 2009, after pile driving caused the building to shake and a full stop-work order was issued in February 2010.

Jeremias was previously sued after defaulting on $83 million in loans for the Jasper, at 114 East 32nd Street.

He faced similar litigation for allegedly defaulting on $48 million in loans from Bank of America, used to purchase and renovate a 13-story office tower at 216 West 18th Street.

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