UPDATED, 5:45 p.m., Feb. 18; correction appended: With $147 million owed to Gamma Real Estate, Bauhouse Group’s site for a planned supertall at Sutton Place may go on the auction block Feb. 29.
Much of the money Joseph Beninati’s firm owes Gamma was used to purchase the site and for costs associated with starting a development project, Stephen Meister, an attorney representing Bauhouse, told Crain’s. Meister said the loan’s terms were onerous, citing Gamma’s $40 million fee on top of the debt due upon the loan’s repayment.
Bauhouse has struggled to secure construction financing, and is seeking an additional $80 million mezzanine loan to fund the residential project, known as 3 Sutton Place. The Real Deal reported the Carlton Group was trying to arrange financing.
Brokerage firm Eastdil Secured will market the site to potential bidders.
The developer initially planned a luxury 80-story tower — now 68 — at the site, which drew heavy opposition from the neighborhood. East River Fifties Alliance, an opposition group, recently filed an application with the Department of City Planning to impose a building height limit in the area to prevent the project. [Crain’s] — Dusica Sue Malesevic
Correction: A previous version of this story misidentified the type of auction. It is a foreclosure auction.