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New York

Former Bowery Savings Bank owners buy time with bankruptcy

Filing to avoid forced sale of LES event space

David Marvisi and the Bowery Savings Bank at 130 Bowery Street (Photo Illustration by Steven Dilakian for The Real Deal with Getty Images, Beyond My Ken, CC BY-SA 4.0 - via Wikimedia Commons)
David Marvisi and the Bowery Savings Bank at 130 Bowery Street (Photo Illustration by Steven Dilakian for The Real Deal with Getty Images, Beyond My Ken, CC BY-SA 4.0 - via Wikimedia Commons)

The lights are coming on at the former headquarters of the Bowery Savings Bank, where the event space could be calling it a night after the owners filed for bankruptcy.

Owners Michael and David Marvisi filed for Chapter 11 protection to avoid a forced sale of the Lower East Side property, according to documents filed late last month reported by the Commercial Observer. The move comes after the owners defaulted on a $12 million loan from Wells Fargo.

Michael said in court documents the bankruptcy became a necessity after events organizer Capitale NYC started missing rent payments during the pandemic; Capitale is the sole tenant of the 40,000-square-foot property, paying $118,000 per month on a lease due to run until 2032. It’s not clear how far behind Capitale is on rent.

When the owners defaulted in August 2020, the interest rate on the loan surged to 9.8 percent, causing their debt to spiral.

The Marvisis have been trying to sell the building since January, initially listing the property for $35 million. A month later, however, Wells Fargo sued the owners, alleging they missed two years of loan payments. The bank wanted to force a sale via auction.

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The bankruptcy filing helps the owners dodge that issue temporarily, but Michael — who personally guaranteed the loan — will still be on the hook for the difference of the loan if the Marvisis manage to sell the building.

Alternatively, the owners could also take their chances in the refinancing market, a bankruptcy expert told the outlet, but the current high-rate environment poses a challenge.

The Marvisis acquired the Stanford White-designed property in 2017. The acquisition valued the building at $33 million.

In 2019, the property hit the market for the first time in nearly two decades, set to be sold through an auction. The owners were hoping to get roughly $50 million in a sale; it’s not clear why the auction was scuttled.

Since 1980, the building has been listed on the National Register of Historic Places.

— Holden Walter-Warner

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BankruptcyBoweryCommercial Real EstateNYC Clubs