Bank wins unsold shares at Rector Square

Anglo Irish paid $83M for 232 units at today's auction; Related to emerge as the likely owner
By David Jones | November 17, 2010 03:11PM

Rector Square and Yair Levy

Anglo Irish Bank acquired unsold shares of Rector Square, the troubled Battery Park City condominium, during a public auction at the New York state Supreme Court this afternoon, with a winning bid of $82.75 million.

Anglo Irish, the senior lender at the 304-unit building at 225 Rector Place, plans to resell the building to new investors, according to the bank’s attorneys, who explained that the bank wanted to make sure the property had stable ownership going forward.

“The bank invested so much in [the building] that it’s interested in seeing that the building finds a good home,” said Herrick Feinstein attorney Chris Sullivan, who represented Anglo Irish in its foreclosure case against the property.

Anglo Irish originally filed to foreclose against developer Yair Levy in February 2009 after the developer failed to pay hundreds of millions in loans, common charges and payments to the Battery Park City Authority. Levy could not immediately be reached for comment.

The property was placed under a court-appointed receiver, who hired Related Cos., the building’s original owner, to complete construction and take over management of the property.

An official from Related signed in as a bidder at the auction, and sources expect Related to emerge as the likely owner of the property, once the bank buys the unsold shares and resells the property. The auction involved 232 residential units, the parking garage, a commercial space and the common spaces. There was at least one other participant who attended the auction but did not register and therefore couldn’t make a bid.

Unit owners expressed disappointment that the deal was not consummated at the auction.

“The unit owners are disappointed that their nightmare has not ended yet and that the reserve fund has not been replenished, however they look forward to working with the bank in any future owners of the sponsor’s units to make this building whole,” said Marc Held, who represents 46 unit owners at building.

The deal is scheduled to close Dec. 15, 2010 at the offices of Herrick Feinstein.