Inability to refinance pushed 20 Bayard into bankruptcy, court documents show
December 09, 2009 06:30PM By David Jones
20 Bayard (right)
According to an affidavit filed in U.S. Bankruptcy Court by Martin Ehrenfeld, director of sales and marketing at North Development and restructuring officer of 20 Bayard Views LLC, the entity that controls the condo, Hagar was unable to refinance a $17 million mortgage loan from Manhattan-based lender W Financial Fund. He was also unable to make a $170,000 interest payment and $85,000 extension fee that would have extended the loan until Jan. 13, 2010.
"The debtor filed its Chapter 11 extension because it no longer had available advances from others to fund its operating expenses and monthly shortfalls due WFF," according to the affidavit.
Hager originally launched plans for 20 Bayard in 2005, which was one in a trio of condo projects that included the Aurora at 30 Bayard and the Icon at 50 Bayard, all designed by architect Karl Fischer. The block eventually became known as Karl Fischer row, commanding more than $860 per square foot, the top asking prices in Williamsburg history.
Hagar, president of North Development Group, developed 20 Bayard on a 31,000-square-foot site with 46 parking spaces overlooking McCarren Park. The property has interiors designed by Andres Escobar, of William Beaver fame, with high-end amenities such as Viking gas ranges, Sub Zero refrigerators, fitness club and roof deck.
"Certainly it started out as a very prime project and people very much wanted to move into this particular building," Fischer, who said he had not been notified of the bankruptcy, told The Real Deal.
In 2007, the developer hired Prudential Douglas Elliman's Barak/Blackburn Group to market 20 Bayard, led by brokers Lior Barak and Christine Blackburn. As the New York market showed signs of a slowdown, the brokers urged Hagar to cut prices, which were the highest in Williamsburg
"They certainly misread the market," said Dan Fasulo, director of research at Real Capital Analytics. "There was a market for them at the time this project became available and they could have sold out everything."
The filing shows total assets of $21 million, which include 37 condo units and 40 parking spaces, and liabilities of $18 million. The debtor's assets are owned by Hager, investor Jack Weingarten and the estate of Chaim Lax.
A meeting of creditors is scheduled for January.
W Financial officials, Hagar and attorneys for the developer did not return repeated calls for comment.
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Comments
Anonymous
I considered buying here but when I attempted to negotiate, and not with a low ball offer, I was told the developer would not even consider my offer. It was 6% below asking. Glad this developer stuck to his guns or I'd be sitting in my condo wondering whether me and my fellow owners were going to see our monthly maintenance soar(it will). I had a similar experience with Warehouse 11 and it is in foreclosure. I think this is a result of greed and not "misreading the market".
Comment #1 Posted By: Anonymous 12/09/09
Anonymous
it's also a result of brokers not being able to sell condos as they once did. W11 had one of Brooklyn's worst - aptsandlofts. They had W11 on the market for what - 1.5 years - and only sold 25 out of 120? are you kidding me. at least 20 Bayard had some sales traction!
Comment #2 Posted By: Anonymous 12/09/09
Anonymous
Looks like people should stay the hell away from where commenter #1 goes....
Comment #3 Posted By: Anonymous 12/09/09
Anonymous
mccarrEn and 50 (not 58)
Comment #4 Posted By: Anonymous 12/09/09
Anonymous
Is not about Greed, it is depence on the construction loan lender, they don't let you sell the price too low, either the seller can pay the different, otherwise lender will not release the lien on that condo unit.
Comment #5 Posted By: Anonymous 12/09/09
Anonymous
#5, perhaps the developer would not be in this mess in the first place if they actually put some of their own skin in the game. Instead, they thought they could make a mint, risk-free, by borrowing and leveraging up to the hilt. So if the going is good, the developer wins. But if the going goes bad, the bank loses. Sounds like GREED to me.
Comment #6 Posted By: Anonymous 12/10/09
Anonymous
#6 - explain the economics of having the developer put in more skin? Certainly there would have been less interest expense but MOST CERTAINLY the interest expense is not the problem here. That the developer didn't put in any skin (you're claim which I highly doubt by the way) seems to be prudent not greedy. It's clear you just don't understand the economics of RE development. Get over the greed thing already - our housing stock has never been in better shape and we have developers to thank for it.
Comment #7 Posted By: Anonymous 12/10/09
Anonymous
Barron has his eye on it for affordable housing. Building will first take Section 8, then be folding into the NYHA. first of many, too many white folk trying to ruin a good thing.
Comment #8 Posted By: Anonymous 12/10/09
Anonymous
#7 - I had similar experience as #1. Had the owners/developers stopped acting like they were Donald Trump, they could have prevented this. I asked to START negotiating at 3% below asking, but they refused. They even told me other people have been offering more than asking. I almost believed them and wanted in, but thank goodness I moved on. I think #5 is absolutely right... It's just plain GREED on their part for not accepting a smaller profit. Plain and Simple.
Comment #9 Posted By: Anonymous 12/10/09
Anonymous
#7 Point well taken on the greed thing but let me explain. When someone as inexperienced as Mr. Hager gets the keys to handle tons of money and jumps in like a novice to develop too many properties at the same time, the guy was in "OVER HIS HEAD" and thought that the party would never end! When he would have played a bit more conservatively, as many very successful vdevelopers have done....they made it throug the best of times and the worst of times! The guy has done too much too soon with very little prior experience!
Comment #10 Posted By: Anonymous 12/10/09