Douglaston Development is facing a $62 million foreclosure suit from CW Capital after allegedly defaulting on loan payments for the Cameo, a luxury rental building at 311 West 50th Street in Manhattan.
In a suit filed Feb. 29 in New York state Supreme Court, CW Capital alleges that Douglaston, led by chairman Jeff Levine, failed to make its monthly installments on $47 million in loans starting in August 2011, and has made no payments through last month.
CW Capital is the special servicer for the debt, which is part of a Bank of America loan pool.
Levine Builders, a unit of Douglaston, originally announced plans for the property in 2000. The project, originally budgeted at $25 million, is a seven-story, 102-unit rental. It opened in 2001.
Rents in the past year have ranged from $2,500 for studios up to $5,500 for two-bedroom units.
Department of Finance records show a $47 million loan agreement with Eurohypo in 2007. However the mortgage was later assigned to LaSalle National Bank and then U.S. Bank, which is the current holder of the note.
Analysts said that the building was fully occupied as of late 2011, but tenants were paying 20 percent less than the market for old leases due to city rent controls, while expenses rose sharply.
According to the complaint, the borrower agreed to hand over rent to the lender if a default occurred. But the borrower allegedly continued to collect the rent in violation of the loan agreement.
The $62 million balance includes interest and other charges, according to the complaint. Levine was not available for comment. Lawyers for CW Capital were not available for comment. A spokesperson for CW Capital was not available.