LNR Partners co-CEO Justin Kennedy and the RenaissanceDeveloper Joseph Moinian is facing a foreclosure suit from LNR Partners, after defaulting on a $93 million mortgage loan at the Renaissance, a 221-unit luxury rental tower at 100 John Street in the Financial District.
LNR, in the lawsuit filed in New York State Supreme Court Feb. 17 alleged that Moinian was notified of the alleged default in August 2010. As The Real Deal previously reported, Moinian has been in negotiations with Miami Beach-based LNR on a deal to refinance the loan after falling behind on the balance.
“Specifically the borrower has been receiving approximately $550,000 a month in rents every month without making monthly payments to the lender under the note and mortgage for approximately a year, even though it has been given notice of its default by the lender,” said LNR attorney Bruce Zabauraskas, in an affidavit.
The luxury tower at 100 John Street was previously part of a large commercial building that Moinian converted into luxury residential units near the corner of Platt Street.
According to the suit, Moinian originally borrowed $93 million from Wachovia Bank in 2007 and later split the loan into an $83 million A note and a $9 million B note, which is subordinate to the A note. The loan was assigned to Wells Fargo in 2008 and to U.S. Bank in 2009. U.S. Bank assigned the loan to LNR in January of this year.
LNR, a special loan servicing firm, alleged that Moinian failed to make the following payments interest on the loan between February and August 2010 and a November 2009 payment into the building’s debt service escrow account. In addition, the suit charges that Moinian failed to deliver the property’s annual budget for approval.
As of Feb. 11, Moinian owed $105.6 million on both notes, including principal, interest, unpaid taxes, advances from the lender and other charges.
According to the complaint, the building generates about $555,000 in monthly revenue, mainly from rent, while monthly operating expenses are $490,000.
The building was the subject of a May 2010 lawsuit in state Supreme Court by six tenants who alleged a penthouse apartment suffered from extensive leaks, mold and other problems. The developer denied the allegations and counterclaimed that the tenants failed to pay rent since April 2010.
LNR has asked the court to appoint a receiver who will be asked to collect the rents and prepare the property for an appraisal and sale.
Moinian declined to comment. Lawyers for LNR declined to comment.