A 4,523-square-foot development site at 15 Renwick Street in Soho, approved for a 65,000-square-foot, 12-story luxury building with 44 condominium units, is set to hit the foreclosure auction block May 23, according to data from PropertyShark.com, but the current owner of the property, Harry Jeremias of the Harch Group, will not be left out in the cold.
Having faced a foreclosure lawsuit in 2010 from U.S. Bancorp for allegedly defaulting on a $55.3 million loan to develop a condominium on the site, embattled Harch Group founder Jeremias reached out to diversified real estate investment firm Glacier Global Partners in 2011 to become an equity partner in order to reposition the debt.
The partnership purchased the non-performing loan from U.S. Bank at a discount last April. The developer and Glacier are expected to take control of the property at the auction, scheduled to take place at 60 Centre Street.
Harch and Glacier have to complete the auction in order to get a clean title, Jeremias said. Glacier will act as the project’s managing partner going forward.
Once the partnership takes title, construction of the long-awaited Soho property will likely begin by the end of the year, Jeremias said, with construction slated to take 15 months. Harch had already excavated the site and completed the majority of the foundation and pilings prior to the foreclosure filing in 2010. The existing work provides Glacier with an opportunity to complete the development at a reduced cost basis and shorter time period, according to its website. Glacier was not immediately available for comment.
While Jeremias declined to comment extensively on the new plans for the building, he said the partnership would be generating revamped designs and was even considering switching from condos to rentals.
Bancorp, in a 2010 lawsuit filed in New York State Supreme Court, claimed that after lending $24.1 million to Harch pre-recession, the loan fell “out of balance,” meaning the outstanding balance of the loan was insufficient to complete the project. Therefore, U.S. Bancorp demanded a $1 million to bring the loan back into balance, according to the complaint. The remaining principal balance of the loan was $28 million, plus interest, taxes and fees.
Glacier, a real estate investment firm, revived other projects stalled in the recession in the last year. It purchased the $40 million first mortgage on the stalled condo project Five Franklin Place in Tribeca last year and has plans to revive the project with partner Fishman Holdings, an Israeli private investment firm, which The Real Deal previously reported.