Yair Levy and 102-104 Fulton Street

Developer Yair Levy is facing a foreclosure suit from Bank of America after he allegedly defaulted on a $2.28 million loan backed by the commercial space at the Fulton-Chambers Condominium in Lower Manhattan.
Levy allegedly failed to make timely monthly payments since July 11, 2009, and got a second mortgage on the property for an entity called LawLand, without the prior approval of the lender, according to the complaint, filed March 8 in New York State Supreme Court. He also granted a “security interest” in the property to Sosana Levy, his wife, without prior approval of the lender, the complaint alleges.
Levy originally borrowed the money from UBS Real Estate Investments in November 2004, and signed a personal guarantee, according to the complaint. UBS later assigned the loan to LaSalle Bank National Association, which was trustee of a commercial mortgage-backed security LB-UBS series 2005-C1. The loan was scheduled to mature in December 2014. Bank of America bought LaSalle in 2007 for $21 billion, thus inheriting its loans. [more]

Homestate Properties office at 102-104 Fulton Street

A new sales and rental brokerage with ties to embattled developer Yair Levy has opened at 102-104 Fulton Street, the former home of now-defunct firm Homestead New York. And with a remarkably similar name — Homestate Properties — the new firm may be trying to piggyback on the success of its predecessor, which ceased operations in 2008 in the midst of the real estate downturn. The new firm is being run by Daniel Deutsch, Levy’s son-in-law and onetime business associate, and is headquartered in office space owned by Levy in the Fulton Chambers building, a nine-story building that Levy and partners converted to 14 condo units in 2004. After selling out Fulton Chambers, Levy retained ownership of commercial condos in the building, according to city documents, and leased space to sales and rental firm Homestead, founded by Eli Adahan and Danny Shamooil. Homestead had about 35 agents and three offices by the time it closed. Its co-founders, who are not involved in Homestate, have now moved on to other ventures. Levy himself may not be involved in the new venture, either. Homestate filed for incorporation with the Department of State in November 2009, according to the agency’s Web site, listing as its address Park Columbus at 101 West 87th Street — a stalled condo conversion, owned by Levy, which is now in foreclosure. But Homestate’s real estate license lists 102-104 Fulton Street as its headquarters, naming Deutsch as a salesperson and attorney Lior Aldad as the broker. [more]

Developer Yair Levy is facing a bevy of fiscal nightmares, including a $100 million suit from 45 apartment owners at a Battery Park City condo conversion filed last month, making him one of the most troubled developers in New York City. While once considered the “condo king” of the city, Levy’s YL Real Estate Developers has come unraveled by poor project choices, according to a Crain’s profile, including Rector Square and Park Columbus. But while some of Levy’s developments, including the foreclosed condo conversion project Sheffield57, have proven irksome for Levy, he contends that many others face similar woes. “Everybody is in trouble,” Levy said, attributing his problems to “too many condo projects at the same time when the market collapsed.”

From left: Yair Levy, Michael Shvo, and Rector Square at 225 Rector Place

A group of 45 unit owners at Rector Square condominium in Battery Park filed a $100 million lawsuit against developer Yair Levy, superbroker Michael Shvo and building manager Cooper Square Realty, alleging widespread fraud, negligence and misrepresentation. According to the suit filed yesterday in New York State Supreme Court, Levy, the owner of YL Real Estate Developers, defaulted on the mortgage loan with Anglo Irish Bank, failed to complete construction of the building, converted reserve funds for his own use and failed to make PILOT payments to the Battery Park City Authority. The plaintiffs claim the sponsor and broker misrepresented the quality of the building to potential purchasers. “Instead of a building of their dreams they bought into a building of nightmares,” said Marc Held, attorney for the unit owners. Levy also allegedly sold a block of 15 apartments to an Italian university for use as dorm rooms for exchange students and rented out apartments to Marriott for use as extended-stay hotels, violating local zoning laws. [more]

Developer Yair Levy has filed for Chapter 11 bankruptcy on Upper West Side condo conversion Park Columbus. YL West 87th Holdings, part of Levy’s YL Real Estate Developers, owes creditor Garrison Investment Group $20 million, according to the bankruptcy filing. The 95-unit Park Columbus, at 101 West 87th Street, has been troubled for months. In March, a subcontractor sued Levy for more than $700,000, alleging that he misappropriated funds for the building. Levy was also a partner in the failed Sheffield57 project. [more]

 Units at Rector Square allegedly available per night and for students

Nearly a year after gaining regulatory approval, Rector Square
developer Yair Levy failed to disclose the building’s financial records
to buyers at the troubled condominium, offered vacant apartments for
extended-stay hotel guests and sold at least 10 apartments for use as
college dorm rooms, according to attorneys and complaints filed with
state Attorney General Andrew Cuomo. Anglo Irish Bank filed suit in New York State Supreme Court earlier
this month to foreclose on the 304-unit building after Levy defaulted
on a $165 million loan to the lender, on payments to the Battery Park
City Authority and failed to meet construction deadlines. [more]