The Real Deal New York

Charles Dayan to build luxury rentals at foreclosed Tribeca site

358 Broadway purchased off auction block for $12M

July 21, 2014 03:55PM
By E.B. Solomont

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358 Broadway

358 Broadway

Developer Charles Dayan is looking to build an 18-story residential building in TriBeca, after the building’s previous owner lost the site to foreclosure.

Dayan’s Bonjour Capital filed plans on Monday to build an 89-unit apartment building at 59 Franklin Place, which has an alternate address of 358 Broadway, according to property records. The plans came on the heels of an application in May to demolish the site’s existing, six-story building. “We’re putting [in] 100 units of luxury rentals,” Dayan told The Real Deal. He said because the N/Q/R subway line runs underneath the building, construction would be a “little bit more complicated. It will take one to two years.”

But Dayan is not the first developer to envision apartments at 358 Broadway.

Previous owner Marshall Weisman, president of W Developers, purchased the building in 2007 and planned to build an 18-story apartment building with 56 units on the site, as The Real Deal previously reported.

But in 2009, Weisman, a resident of Lakewood, N.J. who is associated with several development companies, defaulted on loans totaling $22.75 million, according to court records. The building hit the foreclosure auction block in 2012 with a lien amount of $26.8 million.

Around the same time, Weisman also was sued by investor Hiren “Harry” Shah and three other investors, who said in a complaint that Weisman never repaid a $6.5 million loan. In the complaint, they alleged Weisman accepted the loan to buy out existing commercial tenants of 358 Broadway, and to finance construction of the residential project. The case is still ongoing.

Weisman didn’t immediately return a call seeking comment.

According to court records, the building was sold at a bankruptcy auction in February 2012 to Brooklyn investor Joseph Brunner for $12.3 million.

Two months later, the court records show, Brunner turned around and assigned the bid to Dayan — via Dayan’s Franklin Broadway LLC, the current owner of the building.

“It was a good opportunity,” Dayan said, of the acquisition. “The area is good, of course.”

Brunner couldn’t be reached for comment.

During the financial crisis, Dayan’s Bonjour Capital was slapped with a $50 million lawsuit by the Chetrit Group, a former development partner at 5 Beekman Street, a hotel conversion project. After foreclosure action was taken on the property, Bonjour and Chetrit got into a legal dispute, with Chetrit alleging that Bonjour reneged on a construction loan. Chetrit ultimately won a $2.45 million judgement.

Allen Gross’ GB Lodging eventually bought the property in 2012 for $64 million and converted it into a 287-room hotel and 68-condo development.

In April, Bonjour Capital’s 12-story rental tower at 333 Greene Avenue in Bed-Stuy launched leasing, a year after Bonjour acquired the long-stalled project from its former developers.

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