A New York State Supreme Court Judge approved a request by Istar Financial to appoint a receiver at an Upper West Side tenement complex owned by Adorama investor Mendel Mendlowits, who is facing foreclose proceedings at the properties.
Judge James Yates ordered attorney Peter Weiss to take over as receiver of the rental buildings while the foreclosure works its way through the courts.
The judge further ordered that Walters & Samuels, a Manhattan-based property management firm, oversee the properties.
Istar, a Manhattan-based commercial real estate lender, filed suit earlier this month to foreclose on the site at 201 West 92nd and 200 West 93rd, after Mendlowits allegedly defaulted on a $46 million mortgage, failed to pay $329,950 in taxes and signed a commercial lease for a pet shop without the prior consent of the lender.
Mendlowits now owes the bank $53 million, including interest, legal fees and other charges.
Mendlowits and his family acquired the 134-unit property in 2008 after Kent Swig, who owned the buildings with investors Yair Levy and Charles Dayan, failed to convert the buildings into condos. Swig planned to build condo units on top of the existing buildings, but the plan was rejected by the city Department of Buildings after extensive protests from tenants and local politicians.
Meanwhile, residents at the buildings panicked after a letter, obtained by The Real Deal, was posted in their lobbies, informing them of the foreclosure proceedings. The notice alerts tenants who don’t have a valid lease that they will have 90 days to remain in their units, before being at risk of eviction.
After being notified by Assembly member Linda Rosenthal about the foreclosure, Brian Lawlor, acting commissioner of the state Division of Housing and Community Renewal, assured her that rent-stabilized and rent-controlled tenants would be protected. In her letter, Rosenthal noted that the building was the recipient of J-51 tax abatements.
“Be assured that in these buildings, the tenants continue to be afforded the same level of protection even though the buildings are the subject of foreclosure,” Lawlor told Rosenthal in a Jan. 22 letter, also obtained by The Real Deal.
Mendlowits’ attorney did not return phone calls for comment.