East Village’s languishing PS 64 nears foreclosure

Madison Realty Capital can proceed with takeover of Gregg Singer’s property: judge

New York /
Jan.January 25, 2022 03:00 PM

PS 64 at 605 East 9th St and MRC’s Josh Zegen (Google Maps, LinkedIn)

Gregg Singer, who bought a prime East Village property in the late 1990s for a song only to watch it languish for 23 years as the real estate market boomed, just lost a key battle in his fight to salvage his investment.

A state judge last week ruled that Singer’s lender on the former Public School 64 near Tompkins Square Park, Madison Realty Capital, can move forward with foreclosure after years of legal delay.

“This motion has been pending since 2019 and virtually nothing has occurred in this case since that time,” Supreme Court Justice Melissa Crane wrote in a Jan. 18 decision. “The moment to secure additional funding or wait for the Federal Court has passed. [Madison Realty Capital] has been patiently waiting a long time.”

Crane granted Madison’s motion for summary judgment, which allows it to move closer to forcing a foreclosure sale of the property at 605 East 9th Street.

In a statement, a spokesperson for the company said the firm was pleased with the decision.

“Madison aims to work productively with borrowers. However, in this case, the borrower has refused to make good on his commitments for more than three years, leaving us with no choice but to enforce our rights and remedies,” the statement said.

Singer, however, emailed that he plans to move forward with development of the building “and will inform the court at the appropriate time.”

But the developer’s efforts have been stymied for years by the city and local activists who don’t want him to turn it into a dormitory.

“This is a result of the de Blasio administration standing in the way of granting an ‘as of right’ building permit for a 535-bed affordable college student dormitory in the East Village,” he wrote, adding he has written support from more than 1,600 community residents.

He added, “In the end we believe even [Madison Realty Capital] will be happy. This will be a great asset for the community which is highly desirable and in great need.”

Losing the property to foreclosure would be an ignominious end to the saga, which has pitted Singer against his own investors, community groups, preservationists and the de Blasio administration — all while the East Village gentrified from a bohemian hood to a playground for college kids and wannabe rock stars.

Singer bought the school, which had been closed since 1977, for $3.15 million in 1999. He figured nearby colleges would pay handsomely to house students there. But he claimed the City Department of Buildings, pressured by City Council members opposed to his plans, repeatedly came up with excuses to deny him permits.

In 2018, Singer told the Wall Street Journal he had sunk more than $60 million into the property, including $35 million in interest and $5 million in legal fees. That year he sued the city in federal court, claiming a conspiracy to block his efforts.

During the early days of the pandemic, Singer offered free use of the property as a triage center for coronavirus victims.

Meanwhile, Madison Realty Capital in 2016 had provided Singer with a $44 million loan on the property. According to court records, he failed to repay the balance by its maturity date in April 2016 and that September the lender filed to foreclose.

In her ruling, Crane wrote that Singer had failed to raise any material issues to dispute Madison Realty Capital’s arguments, citing a 25-page response that lacked a table of contents and amounted to a “rambling litany of defenses.”





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