Lenders give Apthorp one week extension on business plan

By David Jones | January 30, 2009 05:58PM

Anglo Irish Bank and Area Property Partners have extended the deadline by one week for the new management team at the Apthorp condominium to come up with a revised business plan, according to sources familiar with the negotiations, who asked for confidentiality due to the sensitive nature of the talks

After settling a long simmering legal dispute, owners Lev Leviev and Maurice Mann were scrambling to develop a new plan with the Broadwall Management Corp., a unit of the Feil Organization, which replaced Mann as managing agent of the building.

The plan, originally due at the end of January, would lay out a schedule to rescue the Apthorp from foreclosure proceedings. In December, Anglo Irish Bank, the senior lender on the Apthorp mortgage, and Area Property Partners, a mezzanine lender known as Apollo Real Estate Advisers until two weeks ago, threatened to foreclose on the building unless Mann forked over about $23 million in additional equity amid concerns that the building would not be able to sell in the current market.

Mann refused and filed suit against Apollo and Anglo Irish Bank for $500 million, leading to a protracted legal fight with Lev Leviev, who partnered with Mann on the  $426 million acquisition of the building in 2007.

The Feil Organization, an investor in the Apthorp, was brought in to replace Mann as managing agent of the building earlier this month after Leviev filed for an emergency injunction in New York State Supreme Court to have him removed. Leviev, an Israeli diamond and real estate mogul, argued that his agreement with Mann required that a rabinnical arbitration court settle the dispute.

Sources familiar with the talks say that the Apthorp, a 163-unit landmark building at 390 West End Avenue, will likely see significant price cuts if it continues as a condominium. The owners originally planned to sell the units for $3,000 a square foot, or an average of $2.6 million per unit, whic would give them little wiggle room for discounting. However, the economic downturn means that the Apthorp units would have to be seriously discounted in order to move in the current market,

Prudential Douglas Elliman, the exclusive listing broker, is offering the units starting at $3.4 million for a 1,750 square foot two-bedroom, which is the equivalent of $1,943 a square foot. Sources say the Apthorp could be converted back to a rental building, however a final decision has not been determined.