$54M notes on SI condos sell for half price

New York /
Jun.June 21, 2010 05:30 PM

The Pointe at 155 Bay Street Landing

Leib Puretz, a builder based in Ocean Parkway, Brooklyn, and described during the boom as one of the most prolific developers in Staten Island, has lost control of two ambitious residential projects near the northern end of the island.

Those developments were snapped up by a one-year-old real estate investment firm called Meadow Partners, based in Midtown, which paid $23 million May 18 for $54 million of notes on the properties in the St. George neighborhood of the island, sources familiar with the deal said. The sole broker on the transaction was investment firm Massey Knakal Realty Services, a source said.

The buildings are the Pointe, a 57-unit, ground-up condominium at 155 Bay Street Landing, which is completed and has five units sold; and the Pearl, a 101-unit residential conversion and expansion of a warehouse building at 130 Bay Street Landing that is about 90 percent finished. There have been no sales at the Pearl, a source said, which is located closer to the Staten Island Ferry terminal than the Pointe is.

On June 8, a few weeks after buying the notes, Meadow Partners worked out a settlement agreement with Puretz in the foreclosure action begun by Capital One in 2009, which put Meadow Partners in charge of completing the Pearl and preparing both for sales in the fall, a person familiar with the deal said. It was not clear what position Puretz would have in the projects going forward. His attorney did not respond to a request for comment. He could not be reached for comment.

Puretz is facing additional financial pressures. A federal bankruptcy judge in Brooklyn for the Eastern District of New York ruled in March that lenders could move forward on the foreclosure of his Staten Island Hotel at 1415 Richmond Avenue, in Graniteville. Creditors of the property, including Geza Holding, took title to the property, April 30, in a foreclosure action, city property records show.

Puretz borrowed a total of $54 million in three loans from Capital One to develop the Pointe and Pearl, sources said. He borrowed $34 million at the Pearl and $20 million at the Pointe, insiders said. The loans went into default, and Capital One filed to foreclose in 2009.

Capital One did not immediately response to a request for comment. Meadow Partners and Massey Knakal declined to comment.

Meadow Partners was founded in February 2009 by former Westbrook Partners managing principal Jeffrey Kaplan, and has recently bought several notes on New York City properties including an office building, a source said.

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