The low-profile firm that paid $420 million for McDonald’s corporate headquarters in Fulton Market three years ago is suing its lenders on the deal, alleging that two major banks didn’t disburse just under $2 million the landlord required, and other mismanagement of the loan.
The suit was filed in New York by an affiliate of Pennsylvania-based landlord Normandy Properties. It outlines challenges that the borrower — which has ties to the Snyder family that inherited a fortune made in the steel industry — says it had with Bank of America, Wilmington Trust and Wells Fargo.
An entity associated with Normandy called 110 NC LLC purchased the 575,000-square-foot property at 110 North Carpenter Street from Sterling Bay in 2020, setting a new record price in Fulton Market. The suit claims that the lenders failed to disburse more than $1.9 million in a “timely manner” under the loan agreement.
“Had the roles been reversed, and it were 110 NC that was two months late making a two-million-dollar payment under the loan agreement, the Defendants would have imposed crushing interest and penalties,” the suit said. “Whereas here, Wells Fargo, which as the Loan’s master servicer was operationally responsible for releasing the funds, has done little more than say, in essence, ‘sorry — these things happen.’”
A substantial chunk of the money Normandy claims it’s entitled to get advanced might not stay in the landlord’s pocket for long, if it does receive the payment. Earlier this year, JLL sued Normandy, alleging the landlord refused to pay the Chicago-based brokerage more than $493,000 in commission its agents say they’re owed for McDonald’s expanding its lease in the building by about 16,000 square feet.
Read more
Residential
New York
Bank of America piloting no-down payment mortgages
Popular
New York
Bank of America will pay $300K to settle DOJ mortgage lending discrimination claim
The landlord told JLL it is not shelling out the commission because the deal didn’t trigger its requirement to pay under its contract with the brokerage, that lawsuit, filed in Cook County court, claims. The case remains pending in court, records show.
An attorney for 110 NC LLC declined to comment. Bank of America and Wells Fargo did not respond to a request for comment.
Normandy’s suit also says that Wells Fargo “repeatedly sent inaccurate loan statements, imposed unexplained and unwarranted fees, and misapplied 110 NC’s loan payments across the seven notes that make up the Loan.”
Wells Fargo was expected to perform the cash management for the loan, including duties such as handling tenant rent payments. But the complaint alleges they weren’t handled properly and eventually the lenders modified the agreement to allow Normandy’s affiliate to handle cash management, which it has done for two years.
“Indeed, Wells Fargo’s attempt at cash management was so chaotic and error riddled that agents of the bank no less senior than the Head of Commercial Mortgage Servicing, Executive Vice President, Alan Kronovet, all but admitted the job was impossible for Wells Fargo and that it was incapable of meeting its obligations,” the suit said.
Normandy is seeking unspecified damages and to recover the fees that Wells Fargo allegedly improperly charged the company.
The nine-story building was developed by Sterling Bay, which bought the site with partner JPMorgan Asset Management in 2014 for $30.5 million. It is the former home to Oprah Winfrey’s four-building Harpo Studios campus, which was replaced by the new office building redevelopment.
McDonalds moved its headquarters from Oak Brook to the building in June 2018. Its lease of 490,000 square feet runs through July 2033.