Kuafu Properties is making the unusual move of foreclosing on itself and its partners at its planned 47-story hotel and condo tower near Hudson Yards.
The New York-based Chinese private equity firm acquired a $44.4 million project loan last month that was granted by UBS for the development, at 462-470 11th Avenue and 554 West 38th Street. The firm is now filing to foreclose on itself and its partners, with whom it has been arguing over finances and negative publicity, citing a loan maturity default.
The move could force a public auction of the property, through which Kuafu could submit its own bid to purchase the site, without partners Blackhouse Development and Siras Development, according to the New York Daily News. Kuafu would have to outbid potential competitors, however.
Kuafu said it had moved to acquire the loan after learning that “loan to own” investors looking to gain control of the property had approached loanholder UBS, a spokesperson told the Daily News.
The planned 380,000-square-foot residential and hotel project, known as Hudson Rise, stalled after infighting between the partners. Kuafu cited a “deadlock” with “no hope of reconciliation” in a petition to dissolve the partnership filed February in New York Supreme Court. A judge dismissed Kuafu’s petition in April.
Siras Development principals Saif Sumaida and Ashwin Verma brought their own $50 million suit against Kuafu in March, claiming the firm had plotted to boot them from the partnership for months. Kuafu filed a counterclaim against Siras in May, accusing it of treating the Chinese firm as “dumb money.”
Blackhouse head Sean Ludwig, meanwhile, is suing Sumaida and Verma, claiming they froze him out of development deals. Kuafu has cited “problematic behavior” on the part of Ludwig — who broke into an ex’s apartment and drew genitalia on murals — as one of the many reasons the partnership soured. [NYDN] – Rey Mashayekhi