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Developer Maurice Mann is in advanced negotiations to settle a lawsuit he filed to block a new loan agreement between rival investor Lev Leviev and Anglo Irish Bank at the troubled Apthorp condominium conversion on the Upper West Side.
“We’re in the middle of a settlement discussion that seems to be going pretty well,” said Jonathan Cohen, an advisor to Mann. “It would be premature to comment on an appeal or any other legal recourse until all the settlement discussions have been completely finished.”
Mann, president of Mann Realty Associates, filed suit earlier this month to block a deal that would implement a new business plan designed to prevent Anglo Irish and Apollo Real Estate Advisors, now called Area Property Partners, from foreclosing on the building.
After Anglo Irish and Apollo threatened to foreclose on the struggling property, the two investment partners reached an agreement that called for the Feil Organization to replace Mann Realty as managing agent of the Apthorp.
Mann and Leviev acquired the Apthorp, which spans an entire block between Broadway and West End Avenue on 79th Street, for a record $426 million in 2007, making it the most expensive purchase of a single residential building in U.S. history, based on the $2.6 million cost per unit.
The developers originally planned to sell units for $3,000 per square foot, which many analysts considered risky even at the height of the market, but when the stock market crashed in September 2008, the building’s developers feared that the business plan was not viable and demanded a $22.7 million payment to bring the loan back into balance. As of December 2008, only one of the building’s 163 apartments was under contract to be sold and about half of the building’s apartments were occupied by rent-stabilized tenants.
Court records show that Mann’s proposed business plan included a bulk sale of 78 units at $1,000 per square foot to outside investors in December 2009, after the condo reached the required 15 percent threshold to be declared effective by state regulators.
In December, Mann filed suit to prevent Anglo Irish and Leviev from calling in the loan. Leviev later filed suit against Mann alleging he had mismanaged the conversion, and won a battle to have him replaced as managing agent of the building. Under an agreement, Mann and Leviev agreed to settle all disputes under a rabbinical arbitration court, called the Beth Din.
Mann filed suit in New York State Supreme Court earlier this month alleging that Leviev’s Africa Israel company and Broadwall Management, the leasing subsidiary of the Feil Organization, put together a business plan without his consent. The new plan called for a $17 million renovation of the property, and a decrease of condo prices by one-third to increase the number of unit sales.
Mann alleged that the new plan would deprive him of a $3.5 million opportunity fee that lenders agreed to pay him after the building was converted. He also alleged that the new plan would deny him the ability to buy a new apartment “at cost” and would place him in greater jeopardy of losing personal guarantees he made to the lenders.
Neither Y. David Scharf, attorney for Africa Israel USA, nor Andrew Ratner, executive vice president of the Feil Organization, was immediately available for comment.