HFZ’s Ziel Feldman and a Halcyon rendering (Source: BuzzBuzzHome)

Developer James Kennelly filed suit Wednesday against HFZ Capital Group and Arbor Realty Funding, alleging the development firm and the lender defrauded him in a deal to give them control of his three Turtle Bay co-op units.

He filed the suit, seeking up to $14 million, in New York State Supreme Court, alleging HFZ misrepresented assets it purchased from Arbor and made false inducements to get him to enter into the deal. [more]

The site of the 2008 crane collapse

Developer James Kennelly is facing a new round of legal woes, as a bank has filed suit to foreclose on his co-op apartment on East 52nd Street, just steps from the site of the deadly 2008 crane collapse at his residential tower project in Turtle Bay. HSBC, the loan trustee, filed suit in New York State Supreme Court — alleging that in August 2010, Kennelly defaulted on a $441,900 loan on an apartment at 304 East 52nd Street. Lawyers for HSBC are asking that the shares in the co-op be sold if the case proceeds to formal judgment. Kennelly first acquired a third-floor unit at the four-story building for $600,000 in March 2006, Propertyshark records show. The next month, he acquired a second-floor unit for $325,000 and, several months later, a fourth-floor unit for $738,000. … [more]

Twenty months after a deadly crane collapse halted construction on a tower at 303 East 51st Street, new life has come to the condominium.
HFZ Capital Group has acquired the note on the building from Arbor Realty Trust for $40 million, after the original principal developer, James Kennelly, invested more than $110 million for the defaulted project, according to sources.

Nineteen of the building’s 30 floors have already been built, and the rest should be completed within a year and a half, according to a source closely involved in the deal. The project, east of Second Avenue, has yet to be named, but HFZ is expected to invest $60 million to complete construction.

HFZ is a partnership between Tamir Sapir and Ziel Feldman, chairman of Polar Investments, and Israeli-based Acro Real Estate, although Sapir had nothing to do with the crane note purchase. Note: Correction Appended… [more]