The Zeckendorf brothers are mulling a takeover of HFZ Capital Group’s struggling $2 billion XI development in West Chelsea.
HFZ said in a December letter to subcontractors that it was in the process of working with Zeckendorf Development and Suffolk Construction on a “a detailed analysis of what work is left to finish for this project,” Crain’s reported.
“You are hereby directed by ownership to fully cooperate and provide any documentation and information to Zeckendorf Development and Suffolk Construction and any of their consultants to achieve this goal,” read the letter, “as well as make yourself available for any meetings as may be required.”
A representative for HFZ, however, denied it was in talks with Zeckendorf.
“There are no such ongoing conversations with HFZ,” Interim Chief Operating Officer William Henrich told Crain’s.
The Bjarke Ingels-designed project is the largest for Ziel Feldman’s HFZ, which is struggling to maintain control of its portfolio as lenders move to foreclose on various properties. Its lender on the XI, the Children’s Investment Fund, this week filed a complaint alleging HFZ was behind on $160 million in payments. The hedge fund provided the developer with a $1.25 billion loan for the project — a 236-unit condo and 137-key hotel — in 2017.
The stress has taken its toll on the firm. HFZ last year laid off about 30 employees and managing partner Nir Meir recently abruptly left the company.
[Crain’s] — Rich Bockmann