The Real Deal New York

Bauhouse’s Sutton Place site may head to foreclosure auction

Beninati owes about $147M to Gamma Real Estate
February 17, 2016 05:55PM

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.

N. Richard Kalikow’s Gamma recently began the process of seizing the property after Bauhouse’s $128.8 million in loans expired last month, and moved to seize the property at 428-432 East 58th Street.

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.