Attorney General Eric Schneiderman and the Apthorp

Attorney General Eric Schneiderman has shut down the sales office at the Apthorp, fined the developers $190,000 and ordered rescission for all contracted buyers following an investigation into misleading statements made to the AG months before they filed suit to block Anglo Irish Bank from selling their $385 million mortgage loan.
The Apthorp developers, led by Africa Israel USA and Broadwall Management, filed suit against the troubled bank Sept. 12, alleging the sale of the $385 million Apthorp loan would “adversely impact sales” and potentially “threaten the conversion project itself.”
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Anglo Irish Bank said in a court filing yesterday that the developers of the Apthorp condominium, on Manhattan’s Upper West Side, gave the lender the right to sell the property’s $385 million mortgage to a third-party by waiving a “no-assignment” clause in the loan agreement, and later defaulted on the loan by failing to meet sales targets.

The Apthorp developers, led by billionaire Lev Leviev’s Africa Israel USA, filed suit in state Supreme Court earlier this month asking a judge to block the sale of the loan to Dallas-based Lone Star Funds, claiming the transfer would threaten the viability of the project by creating uncertainty in the market, which would cut into sales.

Anglo Irish is selling the debt as part of a massive restructuring to exit the U.S. commercial real estate market. The lender is selling its entire $9.5 billion American commercial loan portfolio, and the Apthorp loan sale is part of a $5 billion sale of nonperforming and sub-performing loans to Loan Star. [more]

From the September issue: In its eight years of publication, The Real Deal has covered the real estate industry in a city that’s been transformed by a massive building boom, was crippled by the subsequent bust, and is now in the midst of a tentative recovery.
The compendium of stories we’ve written runs the gamut from the record-setting building and apartment purchases during the boom, to the toppling of mega-developers during the bust, to new entrepreneurs trying to get into the real estate game during today’s fragile recovery. This month, for the anniversary of our 100th issue, we bring you some of the most compelling stories we’ve tracked in these pages, many of which have unfolded and evolved over time, much as the magazine itself has. And watch the video below to see The Real Deal Publisher Amir Korangy talk about the special process for creating the unique 100th issue cover.
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From left: Lev Leviev, 5 Madison Avenue, 229 West 43rd Street, the Apthorp and the Marquis Miami

If the goal of real estate investors is to buy low and sell high, then, according to the Wall Street Journal, Africa Israel’s U.S. investments have failed miserably. Like Japanese real estate investors that lost big on late 1980s purchases of the Pebble Beach golf resort and Rockefeller Center when a recession hit a few years later, Africa Israel’s purchases of the Clocktower Office Building near Madison Square Park, the former New York Times headquarters on West 43rd Street, the Apthorp on the Upper West Side and the Marquis Miami Condo-Hotel will likely result in big losses. For example, the company is in contract to sell the Clocktower building to Tommy Hilfiger for $170 million, despite paying $200 million for the building and spending millions more to convert it to condominiums. Worse, the company is selling 11 of the 16 floors of the Times headquarters to Blackstone Group for $160 million, despite paying $525 million for the entire building in 2007. [more]

Richard Marin, the ousted CEO of developer Africa Israel USA, is suing his former employer for $1.25 million plus damages over an alleged breach of contract, the Wall Street Journal reported. According to court papers filed last week, Marin, who was hired in late 2008, said Africa Israel fired him “in order to cover up wrongdoing that the executive discovered and reported” without paying him the bonus he deserved. Africa Israel has denied the charges — accusing Marin of trying to sue his way out of paying back a $500,000 loan to the company — and said it plans to file a motion to have the case dismissed. [more]

Maurice Mann, the original developer of the Apthorp
condominium conversion, has filed a new lawsuit against his
former partners, alleging they reneged on an agreement to let him
buy an apartment at the building.

Mann, in a lawsuit filed Monday in New York state Supreme
Court, alleged that in 2009, his former development partners,
Apthorp Associates and Broadwall Management, agreed to sell
him apartment 2C at the building, but then refused and offered him
apartment 6A.
Mann initially agreed to buy the historic Apthorp at 390 West End
Avenue in 2006, and later brought in Africa Israel chairman Lev
Leviev as his partner in a record $426 million acquisition. [more]

From left: Ben Ashkenazy and Shaya Boymelgreen

Diamond-dealer-turned-developer Shaya Boymelgreen has two more legal headaches to deal with, from a private lender and a former law firm, seeking more than $22.2 million.

National real estate investor Ben Ashkenazy claims he lent Boymelgreen $21.5 million in 2008 but that the embattled builder has failed to pay the money back, a lawsuit filed in New York State Supreme Court says.

Ashkenazy, CEO of Midtown-based Ashkenazy Acquisition, which owns an interest in mostly retail properties from Manhattan to Beverly Hills, says in the complaint that he lent the money so that Boymelgreen could consolidate a number of debts into one, and that the loan with a 12 percent interest rate was payable 30 days after it was demanded. [more]

Africa Israel USA is “actively looking at new opportunities” for residential conversion projects in New York City, new CEO Tamir Kazaz told the New York Times. Kazaz, who stepped up to the company’s helm after Richard Marin resigned suddenly late last year, was relatively tight-lipped when it came to his predecessor, but characterized the split as the company’s decision. (Sources had told the Wall Street Journal at the time of Marin’s departure that it was unexpected and came amid disagreements with senior management). Now, with a third of the debt it had two years ago, Lev Leviev’s development company is moving forward and eyeing a Financial District office building for a condominium conversion, Kazaz said. [more]

Costas Kondylis’ 88 Leonard Street, the 352-unit Tribeca rental building developed in 2007 by Africa Israel and former partner Shaya Boymelgreen, could garner as much as $200 million in a sale, according to the Post. The 21-story building, which contains11,365 square feet of retail space and sits above a 249-space parking garage, is being marketed by the Cushman & Wakefield capital markets group of Helen Hwang, Nat Rockett, Karen Wiedenmann and Steven Kohn. Comments

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Lev Leviev is going head-first against Bowlmor Lanes in Times Square

Africa Israel plans to throw a counterpunch after a $32 million lawsuit from its biggest retail tenant, Bowlmor Lanes, which accused the struggling real estate conglomerate of dragging its feet on the buildout of a 70,000-square-foot space at the old New York Times building. Lawyers for the Israeli-based developer, led by billionaire Lev Leviev, said they will file suit in New York State Supreme Court alleging the Manhattan-based bowling alley chain is using some space it is not entitled to, and argues that it provided all the construction funds it was required to in a timely manner. [more]