J.D. Carlisle Development, the boutique firm behind the Beatrice rental project, told The Real Deal yesterday that it acquired a stalled condo-hotel site in the Murray Hill section of Manhattan, and will construct a new rental building on the property in 2013.
J.D. Carlisle, led by company president Evan Stein and Chairman Jules Demchick, acquired the site, at 158 Madison Avenue, from lender North Hill Capital Management, a Manhattan-based lender that took over $34 million in defaulted loans at the property.
The original project, a planned 38-story condo-hotel between 31st and 32nd streets designed by Ismael Leyva, was considered difficult to finance, not only because of the economic downturn, but because it was configured in a T-shape and was located in a submarket that is more suitable for commercial development than luxury condominiums.
“The timing made it hard to finance period, but the odd shape didn’t help,” said a source familiar with the project. “The original plan was a condo-hotel. That doesn’t work in most places in Manhattan, but that’s not a condo neighborhood.”
In 2006, the site of Andy Warhol’s former Factory, was planned as a 50-story condo project called Sundari Lofts & Towers from Buttonwood Real Estate and Thor Equities. The project was later revised under investors John Rice and Joseph Ingrassia, of Manhattan-based Capstone Business Credit, who acquired four separate parcels between 2007 and 2008, totaling $42.9 million, and sources say the project was highly leveraged.
North Hill filed suit in New York state Supreme Court in January 2010, alleging the guarantors, Rice and Ingrassia, defaulted on $34 million in loans. The two investors quickly filed a countersuit alleging North Hill engaged in coercive tactics to not only force them into personal guarantees, but also refused to allow them to find alternative financing.
The court ruled in favor of the lenders, but court filings show an agreement was reached between the parties to sell the site to a third-party and use the proceeds from that sale to cover the funds owed to the lenders. J.D. Carlisle officials did not comment on the terms of the deal, but a source familiar with the deal, said the original debt was being sold at a discount. Court records show that the original loan balance had risen to $43.1 million with accumulated interest.
Core Group, led by Shaun Osher, won a lawsuit in 2010 against the developers, claiming it was owed an $113,800 termination fee after being fired as the broker for the proposed condo. Core would have earned $4 million if the project had moved forward.
J.D. Carlisle officials said they expect to launch construction on the rental building in January 2013, and the project would be completed within two years. The firm is still working on a marketing plan and designer for the project.
“We love the location and its proximity to public transportation,” attorney John LaGratta, a director at J.D. Carlisle, told The Real Deal.
Osher was not available for comment and nor were North Hill, lawyers for Rice and Ingrassia, a spokesperson for Capstone nor Buttonwood officials.