Leon Charney and the hotel site at 120 West 41st Street

Billionaire Leon Charney, has sold a development site at 120 West 41st Street to Stanford Hotels, a source close to the deal told The Real Deal.

Stanford, which operates Hilton, Marriott and Sheraton hotels all over the country, paid $19.5 million for the property in a deal that closed late Thursday, the source said. The company is said to be planning a 125-room hotel on the site, assembling air rights from a nearby theater. The acquisition is Stanford’s first foray into the New York market.

Charney, a real estate developer who was once President Jimmy Carter’s foreign policy adviser, had been planning a 22-story, $90 million boutique hotel at the site under an agreement with Minnesota-based Graves Hospitality. [more]

From left: Leon Charney, Peter Malkin and 119 West 40th StreetBillionaire investor Leon Charney is facing a new lawsuit filed last month from Malkin Properties for allegedly reneging on a deal to buy a $22 million mezzanine loan on his Midtown office tower, almost a year after the property was placed under a court-appointed receiver.
The 340,000-square-foot building, at 119 West 40th Street, has been in trouble since December 2009, when CW Capital Asset Management filed to foreclose on a $160 million senior mortgage. Charney, the Manhattan-based head of L.H. Charney Associates and former Carter administration advisor, originally acquired the property for $182 million in 2007 with Manhattan-based George Comfort & Sons and Brooklyn-based Fortis Property Group, one of the city’s top commercial real estate firms. [more]

From left: Leon Charney, owner of L.H. Charney, Peter Duncan, president of George Comfort, and 119 West 40th Street (Building photo source: PropertyShark)

Just weeks after negotiating an agreement to rescue 119 West 40th Street from a mezzanine loan default, George Comfort & Sons and L.H. Charney Associates are facing foreclosure on a $160 million senior mortgage at the site.

CW Capital Asset Management, which is servicing the senior loan on behalf of Bank of America, filed suit in New York State Supreme Court Dec. 14 to foreclose on the property.

George Comfort and Charney originally borrowed $160 million from Wachovia Bank and Greenwich Capital Financial Partners in April 2007, according to the lawsuit, with half coming from each bank. The loan was later sold to GS Mortgage Securities Corp. II, as part of a July 1, 2007, loan purchase deal signed between Greenwich and GS.

In July 2009, Fitch Ratings warned that the 119 West 40th Street loan was performing below expectations. Fitch said the loan was underwritten based on the expectation of resigning below-market leases at higher rents; however, the building fell behind schedule and was transferred to the special servicer in June 2009 with the expectation of imminent default.  More

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