Macklowe claims $250M personal equity in Drake site

New York /
Mar.March 18, 2009 04:59 PM
Harry Macklowe and the Drake Hotel

Harry Macklowe asserted that his personal cash investment in the Drake Hotel development site has grown to $250 million, including millions of dollars his mortgage lender Deutsche Bank forced him to pay to retire mezzanine debt on the property, a court filing this month says.

Macklowe bought the now-demolished hotel at the corner of Park Avenue and 56th Street in a highly leveraged deal for $418 million in 2006, but since 2007, he has poured in an additional $190 million of his own equity at the site, he said in an answer to a foreclosure proceeding.

Macklowe, the former chairman of Macklowe Properties, sought to block the foreclosure sale which would likely wipe out his $250 million equity position in the current depressed market conditions, the court papers say.

Macklowe sounded pained in the response by what he characterized as a rupture in a “longstanding relationship of trust” between him and Deutsche Bank.

“Deutsche Bank betrayed that trust by, among other things, making false promises it never intended to keep to induce Macklowe to pay off, from his own personal assets, nearly $150 million in mezzanine loans related to the Drake property and the [neighboring] Dakotah property,” the March 4 filing says. Macklowe allegedly paid another $40 million in cash infusions related to the project.

Macklowe is fighting off Deutsche Bank’s efforts to foreclose on the $482.9 million in principal outstanding on a mortgage for the development of the Drake site, as well as four townhouses on 57th Street and associated air rights. The lender first filed to foreclose in August 2008. Macklowe’s filing was his first official response to the foreclosure proceedings, known as an “answer.”

Macklowe, while broadly denying the allegations in the bank’s complaint in his response, also said the bank told him it would refinance the loan, inducing him to make the payments that brought his total personal investment up to $250 million.

Spokespeople for Macklowe and Deutsche Bank declined to comment.


Related Articles

arrow_forward_ios
(Image by Wolfgang & Hite via Dezeen)

Hudson Yards megadevelopment inspires a new line of sex toys

Hudson Yards megadevelopment inspires a new line of sex toys
Cammeby's International Group founder Rubin Schron and, from top: 194-05 67th Avenue, 189-15 73rd Avenue and 64-05 186th Lane (Credit: Google Maps)

Ruby Schron lands $500M refi for sprawling Queens apartment portfolio

Ruby Schron lands $500M refi for sprawling Queens apartment portfolio
Wendy Silverstein (Credit: Getty Images)

Wendy Silverstein, co-head of WeWork’s real-estate fund, is out

Wendy Silverstein, co-head of WeWork’s real-estate fund, is out
HFZ looks to sell Shore Club South Beach hotel

HFZ looks to sell Shore Club South Beach hotel

HFZ looks to sell Shore Club South Beach hotel
A rendering of the Staten Island Wheel (Rendering via Perkins Eastman)

Developer of the failed New York Wheel sues its contractor … again

Developer of the failed New York Wheel sues its contractor … again
The home improvement retailer will stay in it's Flatiron location (Google Maps)

Home Depot extends lease for Flatiron store

Home Depot extends lease for Flatiron store
Arthur Miller and Marilyn Monroe with 64 Deep Lane (Getty, Realtor)

Windmill house once rented by Marilyn Monroe and Arthur Miller asks $12M

Windmill house once rented by Marilyn Monroe and Arthur Miller asks $12M
51 Hawkins Lane in Brookhaven (Photo via Google Maps)

Police break up 400-person party in Brookhaven

Police break up 400-person party in Brookhaven
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...