Developer Continuum Company is set to inject $40 million into the troubled One Madison Park residential condominium and finish up the project, after reaching a deal with developer Ira Shapiro and creditors.
The deal, which is contingent upon bankruptcy court approval, would fund the costs of a proposed restructuring on a loan from lender iStar. The lender gained control of the building from Shapiro’s Slazer Enterprises in April, after asserting that the builder had failed to pay it $12 million in interest between October 2009 and February 2010 and owed upwards of $200 million. IStar first filed to foreclose on the property in February.
The building, at 23 East 22nd Street between Park Avenue South and Broadway, is currently the target of pending involuntary chapter 7 bankruptcy petitions in court.
The agreement, announced today, would install Continuum Company Chairman and CEO Ian Bruce Eichner as developer of the project, under the limited partnership “New One Madison Park Member I,” upon the completion of the proposed restructuring. Continuum did not respond to a request for more information. Eichner is reportedly a buyer at the building.
In a written statement, Shapiro said he supported the tentative agreement.
“I couldn’t be more pleased that the product of our tireless efforts to restructure One Madison Park’s balance sheet is the contemplated $40 million infusion that will provide a direct benefit to stakeholders,” Shapiro said.
Shapiro could not be reached for further comment.
The 69-unit, 50-story building currently has 19 units in contract, according to Streeteasy.com.
As The Real Deal reported in January, Shapiro, along with co-developer Marc Jacobs, was sued by more than half a dozen individuals, who claimed that the developers borrowed money from them using units in One Madison as collateral. In March, Attorney General Andrew Cuomo ordered Jacobs and Shapiro to offer refunds to any buyers who hadn’t closed on their apartments, The Real Deal reported.
IStar declined to comment and Continuum Company did not respond to a request for comment.