“Leaning” Seaport condo facing foreclosure on $120M loan

Bank Leumi USA was unable to sell loans privately

New York /
Dec.December 28, 2020 05:33 PM
161 Maiden Lane, Fortis CEO Jonathan Landau and Bank Leumi CEO Avner Mendelson (Hill West Architects; Fortis; Bank Leumi)

161 Maiden Lane, Fortis CEO Jonathan Landau and Bank Leumi CEO Avner Mendelson (Hill West Architects; Fortis; Bank Leumi)

The lender behind a troubled condominium building in the South Street Seaport is seeking to foreclose on more than $100 million worth of loans tied to the property and strip the developer of ownership.

Bank Leumi USA wants to foreclose on $120 million in loans it issued to developer Fortis Property Group to construct a 60-story luxury residence at 161 Maiden Lane.

The bank first tried selling the debt in October, claiming Fortis defaulted on its loan payments in June. But without a buyer, Leumi wants the government to sell the building, “so as to obtain the greatest return of the sale, whether sold jointly as a single parcel or sold separately as two or more parcels,” the lender said in a complaint filed last week in New York State Supreme Court.

Leumi claims that $99.9 million of its $120 million credit line has been extended through mortgages, notes, credit agreements and loan agreements. The residential tower remains unfinished, and the lender argued that because Fortis could not get a temporary certificate of occupancy, it has been unable to sell the remaining apartments.

Fortis sued its lenders in October, alleging that the construction loan fell $30 million short of its full amount, and that the group of lenders, led by Bank Leumi USA, had not funded the loan since March 2019. The developer also said the lenders were required to provide funding in the event of budgetary issues or construction delays.

Representatives for Fortis and Bank Leumi USA did not immediately return a request for comment.

A potential sale of the property would strip Fortis of its ownership of the building, and could mark the final chapter in the property’s long and troubled history.

A construction worker fell to his death while working on the project in 2017, for which a subcontractor pleaded guilty to manslaughter. After a crane operator sent a concrete bucket smashing into the 34th floor the following year, concrete poured onto the street below.

And in 2019, Fortis and contractor Pizzarotti traded suits over the building’s misalignment three inches to the north, which caused it to lean.





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