From left: Ziel Feldman, managing principal at HFZ Capital, One Madison Park and Stephen Ross, chairman of Related

Related Companies has reached a deal to settle most of the outstanding claims — estimated to be in the tens of millions of dollars — in the ongoing legal drama at the One Madison Park condominium and expects to relaunch sales late this year, The Real Deal has learned.

The settlements, which include $6.75 million in unsecured claims and several million in additional claims, will allow Related to complete construction at the site and resolve a number of outstanding title disputes at the property, at 23 East 22nd Street, which would allow the developer to put most of the unsold inventory back on the market. [more]

From left: HFZ Capital founder Ziel Feldman, Vornado Realty Trust Chairman Steven Roth and 11 East 68th Street (building credit: PropertyShark)

HFZ Capital Group joined Vornado Realty Trust in its previously reported acquisition of 11 East 68th Street, and will take control of the 41 residential units while Vornado presides over the 100-foot-long Madison Avenue retail space, the Wall Street Journal reported.

In September, Vornado entered into contract to buy the Upper East Side rental building for $170 million, a $21.8 million discount on the amount the sellers, ABRO management, paid for it in 2008. [more]

From left, 303 East 51st Street, Ziel Feldman, founder of HFZ Capital
Group, and City Council member Jessica Lappin

For three and a half years, the structure at 303 East 51st Street has remained a stunted
skeleton, halted at 18 stories after the infamous March 2008 crane collapse that killed
seven people and crushed an adjacent building.

But that may change soon.

Ziel Feldman, founder of HFZ Capital Group, which closed on the purchase of the site
early this year, said through a spokesperson that he would have “significant progress to
announce” later this week, and the firm plans to restart construction at the site, on 51st
Street between First and Second avenues, this spring.

The expeditor on the project, Laurence Gillman, an associate at Jerome S. Gillman
Consulting Architect, said that the Department of Buildings had completed its zoning
examination of the plan and was reviewing architectural and other drawings as part of a
building code review. [more]

Developer Ziel Feldman’s HFZ Capital Group signed a contract to buy three adjacent parcels in Chelsea where it plans to build an approximately 100,000-square-foot, mixed-use building rising on both sides of the elevated High Line park, Feldman told The Real Deal.

The two-towered project will have about 90,000 square feet of residential space — condominiums with the possibility of some rentals as well — rising both east and west of the tracks, and at least 10,000 square feet of retail that will pass under the High Line with frontage on 10th Avenue.

“It is one of the better sites in the city as it straddles both Chelsea and the Meatpacking District,” Feldman, the company’s chairman, said. “Both communities have become residential where demand has been soaring.” [more]

Top left: Ziel Feldman; Bottom left: Steve Ross; Right: One Madison Park

The new holders of the senior debt at One Madison Park issued subpoenas yesterday to force investor Green Bridge Capital to disclose its relationship with Ziel Feldman’s HFZ Capital and why the firm is refusing a June 30 offer to accept a new plan backed by Related Cos.
The new proposal, by an entity called One Madison FM, is designed to bring in new bidders through an open auction and substantially raise the value of the property. Sources say the new entity is backed by Related Cos. Chairman Steve Ross, who is pursuing a plan to become the new sponsor of One Madison Park.
Related, one of the largest and most respected real estate developers in the city, is working with Amalgamated Bank on a financial plan to help pay off creditors of the bankrupt condominium at 23 East 22nd Street, and complete construction.

“He wants to develop it,” according to a source familiar with Ross’ plans for the property. [more]

Ziel Feldman and One Madison Park

Amalgamated Bank has acquired the senior piece of the One Madison Park condominium mortgage loan from iStar Financial, according to federal bankruptcy records obtained by The Real Deal, jeopardizing a rescue plan submitted earlier this month by HFZ Capital.

Manhattan-based Amalgamated already held the $78.5 million junior piece of the mortgage loan, and a New York state Supreme Court judge refused to block the deal despite a $75 million lawsuit from HFZ, a distressed real estate firm led by investor Ziel Feldman.

HFZ asked the judge to block the deal on the grounds that Amalgamated, after initially promising to sell the junior piece to HFZ in November 2010, reneged on that deal and swooped in on the senior note after HFZ filed a rescue plan in U.S. Bankruptcy Court. [more]

The developers of a troubled Turtle Bay condominium tower filed a $100 million malpractice lawsuit against two high-powered law firms Cozen O’Connor and Blank Rome for allegedly giving them bad zoning advice prior to the fatal March 2008 crane collapse that killed seven people at the East 51st Street site.

The developers, led by former firefighter James Kennelly of Kennelly
Development, alleged in a suit filed June 13 in New York state Supreme
Court that their former zoning lawyers provided flawed legal opinions,
which led them to overestimate the value of the property, leading to the
eventual default of $70 million in loans with Arbor Realty Trust.

“Cozen and Blank Rome’s incorrect analysis of the applicable zoning
regulations and their failure to conduct sufficient and adequate due
diligence caused plaintiff to overestimate the value or potential value of
the project,” attorney Rex Whitehorn, representing Kennelly, wrote in
the complaint, “and plaintiff made irreversible decisions with respect to
financing while relying on plaintiff’s advice.” [more]

HFZ Capital’s Ziel Feldman, Green Bridge’s Cevdet Caner and One Madison Park

A long-awaited reorganization plan was submitted in the One
Madison Park bankruptcy case late yesterday evening giving
an outline that could finally lead to the troubled condominium
settling millions of dollars in claims and resuming sales.

The plan, submitted to the U.S. Bankruptcy Court in Delaware,
calls for senior lender iStar Financial to get $162 million in the
form of a secured note.

In addition, $12.5 million in mechanics liens would be recovered
in the form of cash, $15 million to $20 million in “unclassified
claims” would be recovered in immediate cash, deferred cash
and other payments and another $160 million to $180 million in
unsecured claims would be recovered at the rate of 3 to 5 percent. [more]

Steve Ross is the latest developer angling for a piece of One Madison Park, the skinny glass condo at 23 East 22nd Street that’s been mired in lawsuits since its owners ran out of cash in 2009. According to the Wall Street Journal, Ross’ Related Companies is working on a bid with Amalgamated Bank, one of the project’s junior lenders, to wrest control of the property through a buyout of senior lender iStar Financial’s debt. The Amalgamated plan was revealed in yet another lawsuit filed yesterday by Ziel Feldman’s HFZ Capital, which is expected to submit an official rescue plan for One Madison to federal bankruptcy court in Delaware within days. [more]

Ziel Feldman’s Manhattan-based HFZ Capital Group is setting its sights beyond Manhattan island, as it has tapped Jacqueline Finkelstein to head a team focused on purchasing performing, non-performing notes and fee positions across the country. Finkelstein had previously worked for the Moinian Group, but left the firm (she declined to discuss her departure) to pursue some real estate opportunities of her own. Now that most of them have wrapped up, she said she is focused solely on her new role with HFZ Capital, which she started about two months ago. “I just feel HFZ permits me to have access to deals I haven’t been able to access in the past,” she told The Real Deal. TRD [more]