Brooklyn developer to face bank in condo default case
July 31, 2008 03:16PM By David Jones
Caton on the Park [Courtesy I2]
Brooklyn developer Moshe Feller is scheduled to face off in court next month against Corus Bank, which filed suit against his Karl Fischer-designed Kensington condominium development about two months after contractors walked off the job.
Corus filed suit in June against Caton on the Park, a 107-unit condo building that has sat idle since April 4, when the New York City Department of Buildings issued a stop work order.
Corus loaned Feller $32.8 million in 2006 to develop the condominium at 23 Caton Place. Feller acquired the site, formerly owned by Kensington Stables, for $6.25 million in 2005.
Corus declined to comment and Feller could not be reached for comment.
Corcoran Group was lined up to handle sales and marketing for the project, but it has remained only 40 percent completed since April.
Fischer, who has teamed with Feller on a number of projects in Greenpoint said in an interview earlier this month that he was not sure where things stood with construction on the site.
"I suspect it had to do with the financial crunch," said Fischer. "I haven't spoken with [Feller] in quite a while now."
Feller filed a motion in March against Sagecrest II, a Greenwich, Conn.-based hedge fund that provided mezzanine debt for the project and was scheduled to sell off its interest in the property, according to court documents. Feller was trying to stop Sagecrest from selling its mezzanine debt while he tried to work out a deal with Corus.
Sagecrest was supposed to meet with the developer regarding the status of negotiations with Corus Bank, court documents showed.
Parent company Corus Bancshares has been rocked by losses related to bad condominium loans, particularly in Miami, where it has six loans that are at least 90 days late, with a total balance of $314 million.
Corus said its overall loans that are at least 90 days late have nearly doubled to $830 million as of June 30, compared with $420 million at the end of March, according to a quarterly report filed with the Securities and Exchange Commission.
Corus said it has seven condominium loans with a balance of $453 million outstanding in New York City. The bank has one loan in New York that is 90 days late, with a balance of $14.3 million. Corus did not specify the project, but sources said that it is Caton on the Park.
The Chicago-based lender reported a loss of $16.2 million, or 30 cents, in the second-quarter, its first-ever quarterly loss. That compared with earnings of $42.4 million, or 74 cents, a year ago.
State Supreme Court Judge James Starkey is scheduled to hear the case on Aug. 6 in a Brooklyn courtroom.
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Comments
Anonymous
Thanks for this posting. One clarification: Kensington Stables did not own The Little Grey Bar but rented it from someone who sold it to Feller.
Comment #1 Posted By: Anonymous 08/01/08
Sharon Goldman
As someone who lives across the street from this shell of a building, I can say this is a pathetic and sad situation. And it's the Kensington community that ends up suffering -- with a block full of debris, a building that looks like a vastly oversized pigeon coop, reduced parking on the block, security concerns and little hope of anything changing anytime soon.
Comment #2 Posted By: Sharon Goldman 08/01/08
Anonymous
Correct. The Little Grey Barn, which used to be leased to Kensington Stables, was sold in 2005 by it's former owner, Gloria Jarman for 1.2 million. This is a matter of public record.
Comment #3 Posted By: Anonymous 08/01/08
Jo Oppenheimer
The fact is that the abandon building at 23 Caton Place not onlt is an eye sore but continues to remove much needed parking spots for those of us who live next door and cross the street. The building never should have been approved in the first place with its height of nine stories, an abandination in a neighborhood where six stories has been the norm. I would hope that the building is either completed or, preferrably, torn down!
Comment #4 Posted By: Jo Oppenheimer 08/02/08
D.
Expect to see more and more of projects like this in Brooklyn. Developers are going to go belly up because of the DOB. Which I believe to be the case here. There are two major problems with Brooklyn developments. One, the DOB is absolutely incompetent, and yes the fish does stink from the head. Magdi Mossod, the boro commissioner, and and his assistant commissioner Tom Fariello R.A. are probably the two most incompetent people you can meet. This office will stop a project on a whim. They fear the news media. There have always been construction related accidents. It is tragic. The reason there are more now the ever is, the DOB stops a project and make a bad condition worst. In an open excavation the worst thing you can do is issue a "stop work order", the rain causes more damage, then if the builder continues to work. Builders carry an incredible amount of insurance. If there is damage to an adjacent property. Insurance kicks in. Try digging a hole in the sand, and not have any surrounding sand fall into your hole or if you hit a boulder below grade, and that boulder is on the property line, do you remove it? Who does it belong to? Now what? The building code has no provision for mother nature and unknown sub surface conditions. The second problem is, the neighbors. True, they are the most inconvenienced, but, having a project built next door to you, can be more lucrative the winning the state lotto. The problem is the folks want there win fall without the damage. So they call 311, yes 311 the worst thing to happen to builders since Magdi and Tom joined the DOB. This project on Caton has received 83 complaint and only 7 or so violations. Word has gotten out that if you start complaining right away, build a strong case against the builder, you can make a lot of money. 311 and the DOB is your best friend in this case. What has to happen, the DOB should grow a pair of "you know whats". Create a code the is realistic for builders and neighbors. The DOB should try to be part of the solution and not the problem, the DOB commissioners should be strong men with integraty, and do what is NECESSARY not what is POPULAR and lastly Brooklyn needs a strong Builder Association.
Comment #5 Posted By: D. 08/03/08
Anonymous
FYI, D: 311 wasn't called until the construction STOPPED - and it became not only an eyesore - but dangerous to walk near. 311 is a better number to call before you have to dial 911 - after a chuck of construction crud blows off the 5th floor on top of a pedestrian's head.
Comment #6 Posted By: Anonymous 08/03/08
D.
83 Complaints to 311. I am not trying to defend is developer. This is the point i am trying to make. Now this project is at a stop. The developer with file for bankruptcy. The bank is left holding the bag. This project will remain just as it is today for 24 month minimum. The DOB has no right to kill a project. There function is to regulate construction, not police it. The Boro Commissioner has told many developers that he with "stop work indefinitely". What the hell does that mean and who the hell gave this dope the power to do this. That project is more dangerous now that is stopped. If you go the the DOB website you can see the the DOB was monitoring the construction on a weekly bases. I think this was the right course of action. If you drive through Brooklyn, you'll find many project in this state. This dope is responsible for all of them, but not accountable. A total of 16 construction related death this year, it is very tragic, consider the amount of construction that is going on in the City, the amount of construction workers and you'll find the ratio is extremely, extremely small. There were more bicycle related deaths. Apartment are already very expensive here. What will more regulation, more inspector, more taxes to pay more inspectors, higher DOB fee, and more violations do to help us? Nothing!!
Comment #7 Posted By: D. 08/03/08
Shannon Wagner
Does anyone know the result of the August 6th court case which was mentioned in this article? Nothing has changed at the site of Caton on the Park recently. Last month, I suggested to the security guard that maybe the developer should post some notices at the site or in the neighborhood to explain the current state of the development at 23 Caton Place directly to the neighbors, so that the mystery goes away. The guard seemed open to the idea, but I guess nobody else was. That sort of direct communication with the neighborhood would sure be a good form of public relations, though. Especially in light of the stalled project across the street at 22 Caton Place. Most of the block remains sort of abandoned-looking.
Comment #8 Posted By: Shannon Wagner 08/22/08
Anonymous
what the hell are the neighbers doing
Comment #9 Posted By: Anonymous 09/04/08
g
In steadeof being happy that the price of there apt. willgo up
Comment #10 Posted By: g 09/04/08
Anonymous
I hope they build the biggest building in Brooklyn @ 23 and 22 Caton. I hope the streets are crowded and full of cars and trash. Why???? Beacause that means $$$$$$$$$$$$$$$$$$$ for current owners and community. Its a dumpy area maybe we should sell it to the Army for bomb testing.
Comment #11 Posted By: Anonymous 11/06/08