Winthrop Realty cries foul over stalled $55M Meatpacking loan

Company claims landlord refused to provide documentation that lease is in good standing
By Adam Pincus | June 02, 2014 06:24PM

Winthrop Realty Trust, the publicly traded real estate investment company, is accusing its landlord at the 15-story Meatpacking structure known as the High Line Building of refusing to provide a typically non-controversial document the company needs to secure a $55.25 million loan.

The Boston-based Winthrop, headed by CEO Michael Ashner, through its company High Line Development, claims the landlord of 450 West 14th Street is holding back on providing a certification that the lease is in good standing.

Without that so-called estoppel certificate, Winthrop can’t refinance and pay off the current $54 million loan on the building, the company said in a lawsuit filed Friday in New York State Supreme Court.

“In connection with a $55.25 million refinancing transaction which was about to close,” the complaint says, the landlord refused to “furnish [Winthrop’s] new lender with the required estoppel certificate.” The new lender is set to be the German firms Aareal Capital and Aareal Bank.

The suit underscores the tensions that occasionally flair between property owners and their tenants under long-term ground leases. The Real Deal has reported about similar battles between Solil Managment — the company that controls property owned by the estate of Sol Goldman — and tenants at several of its properties.

The Hirsch family, with roots in the meat packing business, has owned the Meatpacking property for decades. Gerald Hirsch signed a lease in 2004 for 49 years with Charles Blaichman, whose firm CB Developers redeveloped the building. In 2011, Winthrop acquired a $15 million preferred equity position in the 102,000 square foot structure. As part of the original redevelopment, the landlord agreed to provide estoppel.

Hirsch could not be reached for comment. An attorney who has represented Hirsch in the past did not immediately respond to a request for comment.

Stephen Meister, a partner with the law firm Meister Seelig & Fein, who is representing Winthrop, declined to discuss the case in detail, but said his client was not shrinking from a court battle.

“Bad faith refusals to perform one’s agreement are never a good idea when the other party is Michael Ashner,” Meister said. “I trust Mr. Hirsch is in the mood for a long, hard, expensive fight.”