Lender Citibank filed suit last week to recover a nearly $100,000 business line of credit it claims Downtown Islamic center developer Soho Properties has failed to repay.
Citibank says Soho Properties and its chairman Sharif El-Gamal have not repaid the loan of $99,489.87, according to a lawsuit filed in New York State Supreme Court Nov. 24.
“Soho borrowed funds from the business credit account for which payment was never made,” the court filing says. The date of the loan was not provided, nor the date of when the loan went into default.
El-Gamal told The Real Deal in a statement through a spokesperson that Soho Properties was attempting to restructure the debt used for general operating expenses, and was not experiencing a cash-flow shortfall. In a common practice in today’s environment, borrowers are halting payments to put a loan in default, which allows them to begin negotiating with the bank.
“In every industry at this time major business leaders are working with their financial institutions to restructure their debt in order to take advantage of historically low interest rates,” the statement said. “It is important to note that Soho Properties manages over $300 million worth of property. This credit line represents a small fraction of our business. This matter will be resolved shortly with Citibank.”
Soho Properties is the developer of Park51, the Islamic mosque and community center planned for 51 Park Place near Ground Zero.
The suit had four causes of action, including breach of contract and unjust enrichment.
El-Gamal is personally liable for the debt, the bank alleged in court papers.