New details about the financing behind the massive condominium conversion at the Manhattan House are raising questions among critics and some public officials about the long-term viability of the Upper East Side project. Documents filed with the state attorney general’s office show that in 2009, HSH Nordbank, which holds a $750 million loan on the building at 200 East 66th Street, established a special fund to help the developer, O’Connor Capital Partners, meet its monthly expenses at the property. “My concern about Manhattan House is that one day the sponsor says that they have no money and that basic repairs and maintenance cannot be maintained,” said City Council member Dan Garodnick, who, along with state Assembly member Jonathan Bing, has held discussions with the developer over the financial condition of the building. Developer O’Connor Capital Partners has insisted the conversion is in good shape, Garodnick said. [more]

The financially troubled Upper East Side condominium,
Manhattan House, is facing a $2.5 million lawsuit from a buyer who wants to back out of
her contract amid concerns that the developer could default on its
construction loan. The buyer, Helene Kahn, is demanding that developer O’Connor Capital
Partners return her deposit, after the company refused to guarantee
that the building was solvent. The suit, filed March 20 in New York
State Supreme Court, alleges breach of contract, unjust enrichment,
breach of fiduciary duty and breach of implied warranty. Kahn, who put a 10 percent deposit down on a $1.3 million apartment at Manhattan House, at
200 East 66th Street, in March 2008, demanded that the sponsor offer
written assurances that it would complete construction and not default
on its loan with Germany’s HSH Nordbank, the senior lender for the
conversion. [more]