A hotel development project in Lower Manhattan delayed by the pandemic appears to be on unsteady financial footing and facing foreclosure.
Bank Hapoalim is alleging that Hidrock Properties has not paid back the $32.8 million loan that the Israel-based lender provided for its purchase and development of 140 Fulton Street in the Financial District, Crain’s reported.
Hidrock purchased the 2,700-square-foot vacant lot and an adjacent six-story building at 140-142 Fulton Street for $19.8 million in 2018. The property, which had five apartments and a restaurant, was demolished.
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Hidrock filed permits in 2019 to build a 139,000-square-foot hotel, New York Yimby reported. The site, located mid-block between Broadway and Nassau Street, was expected to be occupied by a Tempo by Hilton.
But the pandemic brought the 286-key, 40-story project to a halt, and financial issues soon followed. Hapoalim pushed back the loan’s maturity date three times, with the most recent extension coming last October when it moved the deadline to March, according to court records.
But Hidrock allegedly failed to meet that deadline, and Hapoalim notified the developer in May that it was in default.
Hidrock claimed it was caught by surprise, saying it believed Hapoalim had approved a fourth extension and formally agreed to do so. Hidrock is asking a judge to rule that the developer has not defaulted on its loan obligations.
“Business travel is finally ramping back up in New York, and now that Labor Day is past, we expect things to normalize soon,” Hidrock’s Abie Hidary told the publication. “We expect both sides to come to a resolution to get the project built.”
— Pat Ralph