The Real Deal New York

Mystery buyer to complete construction of ill-fated Clinton Hill condo?

February 29, 2012 08:30AM
By Katherine Clarke

  • Print

525 Clinton Avenue

When the skeleton of an incomplete condominium project at 525 Clinton Avenue and 508 Waverly Avenue in Brooklyn hit the foreclosure auction block Feb. 23, one would have been forgiven for assuming that the project’s longtime lender, TD Bank, would finally take the reins — the building had a total outstanding lien of $25.5 million.

What some followers of the building’s progress may not have known however, is that TD bank no longer held the mortgages and judgments on the Clinton Hill development. The mortgages were transferred to a mystery LLC, identified only as Clinton 525 LLC in public documents Jan. 17.Having purchased the mortgages and judgments against the property totaling $25.5 million, the LLC had to pay only $2,000 in total to take control of the two sites at last week’s auction, held at 360 Adams Street in Brooklyn.

The new owner, which some sources speculated may be a private equity firm, could opt to finish construction on the condo, which is 80 percent complete but has sat empty since 2008, sources said.

The 30-unit building, which became a symbol of residential market woes during the downturn, made headlines in 2008, when construction worker Jose Palacios died and another worker injured after a scaffold secured by a hanger wire at the site collapsed in high winds. The incident delayed the original developer Karnusa Equities’ work at the property and it was fined $1,600 for not having a permit for the scaffolding.

TD Bank finally filed to foreclose of the project in March 2009, several months after construction stalled and the recession soured the project’s ability to move forward.

The development, which was to be known as the Collection, was slated to have three units per floor. The units were to range from 780 square feet to 2,100 square feet and from $650,000 to $950,000 in price. As previously reported, the project was unpopular in the community from the start, when Karnusa tore down a home for mentally-disabled adults to make way for the condo.

Karnusa, which is also one of the developers behind Kirkman Lofts, the new Brooklyn condo development at 37 Bridge Street, was not immediately available for comment. Kenneth Horowitz, an attorney for the new owner, declined to comment, while a representative for TD Bank was not immediately available for comment.

MENU

Subscribe to our email newsletters

New York Real Estate News
South Florida Real Estate News