The Real Deal New York

Jeremias faces suit over Chelsea office tower

January 07, 2011 05:19PM
By David Jones

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Developer Harry Jeremias and diamond retailer Tsvi Pluczenik are facing a multi-million dollar lawsuit after they failed to complete a 13-story office tower in Chelsea that was recently in foreclosure.

Jeremias, of the Harch Group and PHH Realty Group, defaulted on $48 million in loans from Bank of America to redevelop the office building at 216 West 18th Street. Pluczenik, president of Universal Pacific Diamonds & Jewelry and the Pluczenik Group, co-owned about 93 percent of the property along with Jeremias.

The lawsuit, filed in New York State Supreme Court by an entity called 216 W 18 Lender, alleges the building was originally scheduled for completion in April 1, 2008, and then the deadline was extended until Sept. 30, 2008. The entity, which sources say is led by the Fishman Group, based in Tel Aviv, Israel, acquired the loans from Bank of America in November of last year.

The loans came due in November 2008 and an entity called Mortgage Electronic Registration Systems Inc., on behalf of Bank of America, filed suit to foreclose on the property. A receiver, whose responsibilities included completing the building, was appointed by the court in November 2009.

Court records show that as of May, about $6.1 million was advanced for construction of the property and almost $2.47 million was spent.

By August, the expended funds reached $4.6 million and the developers were notified of the new expenditures in writing, court records show. The court will decide how much money the developers will be liable to pay back.

The funds were used to install a roof, elevators, lighting and plumbing fixtures and to get insurance for the property.

Neither Jeremias nor Pluczenik were available for comment. Lawyers for the lenders were not immediately available. Galia Feiler, chief executive of the Fishman Group, was not immediately available for comment.

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