Glenwood Management is foreclosing on $78.6 million in loans given to developer Tribeach Holdings, following a now-familiar pattern of well-established builders seeking to take advantage of the downturn by acquiring distressed development sites.
Like many projects in New York City, the one at 301 West 46th Street at the corner of Eighth Avenue where Tribeach sought to build a 38-story hotel and condominium, was battered by the economic downturn. By 2009, construction ground to a halt.
The original lender on the project, Bank of Scotland, declared the loans, given in 2007 for the acquisition and development of the project, in default on Sept. 2 this year. On Sept. 13, the bank sold the note for an undisclosed price to Glenwood’s entity West 46th Street LLC, a lawsuit filed Oct. 21 in Manhattan State Supreme Court by Glenwood shows. Sources said commercial services firm Jones Lang LaSalle brokered the deal. An outside spokesperson for the brokerage said the company was not immediately available for comment.
The development site is a complex assemblage of land, air rights and leaseholds, at a location now comprised of vacant land, a vacant mixed-use building and a parking lot, the lawsuit says.
Tribeach filed plans in 2008 to build the 415-foot tall mixed-use tower, but the plans were never approved by the city’s Department of Buildings, agency records show.
The tower was to include a 375-room hotel, 35 condos and an unspecified number of market-rate and subsidized rental apartments along with additional amenities such as a swimming pool, bar and restaurant with a completion date of 2010, according to the Tribeach website.
In addition, the lawsuit claims the principals of Tribeach — James Mooney, William Fegan and Adrian Stroie — collectively face personal guarantees of up to $15 million for the defaulted loans. It was common during the boom for lenders to require personal guarantees from less-established developers, and the promises of payment are now frequently used to apply pressure on borrowers during the foreclosure process, insiders say.
The principals at Tribeach declined to comment. Gary Jacob, Glenwood’s executive vice president, said his firm had no comment.
Glenwood, which owns and operates about 25 mostly high-end rental apartments in Manhattan, had been reluctant to buy during the run-up of prices. But Jacob told The Real Deal in March that it was actively looking to buy property on the West Side since prices had fallen.
The hotel and condo project is the largest attempted by Tribeach in Manhattan, which has built condo projects in Soho and Tribeca as well as bigger developments in Eastern Europe, reports said.
Other developers who have snapped up distressed properties recently include Toll Brothers, which acquired the stalled development site at Lexington Avenue and 65th Street on the Upper East Side, and Canyon-Johnson Urban Fund, which bought a 39-unit condo project in Brooklyn Heights.