Investor’s Bowery Development Site to be Foreclosed, Sold

A Downtown Manhattan development site targeted for an office project is heading to the auction block instead.

A state judge ruled last week that Urban Standard Capital could sell 171 Bowery on the Lower East Side after the lender filed a foreclosure action against investor Grant Shapolsky and his firm, Prime Manhattan Development, last year.

Urban Standard, Shapolsky and Prime Manhattan had agreed to a consent judgment of foreclosure and sale in December.

A referee will sell the property at a public auction within 90 days of the judge’s order and oversee the title transfer. The development site will be sold as one parcel.

Prime Manhattan bought the property, located between Broome and Delancey streets, in 2017 for $8.7 million and filed plans in 2019 for a 10-story, 21,000-square-foot office project. Demolition permits for the property’s four-story multifamily building were filed later that year.

Urban Standard is owed at least $9.6 million plus accrued interest, which piled up at a default rate of 24 percent. If funds from the property’s sale are not enough to cover the debt, Urban Standard can recover all or a portion of the remainder from Shapolsky and Prime Manhattan.

In the consent judgment, Shapolsky waived his rights to contest the appointment of a referee to determine what was due to Urban Standard.

Neither Urban Standard nor Shapolsky and Prime Manhattan responded to requests for comment.

The stalled Bowery development site faced foreclosure last year when Urban Standard accused the borrowers of defaulting on a $7 million loan. The lender also alleged that Prime Manhattan failed to discharge a $142,000 mechanic’s lien filed by Kutnicki Bernstein Architects in 2021, along with a $97,000 lien filed by general contractor OTL Enterprises.

Shapolsky told The Real Deal in September that the dispute would be solved “over the next few weeks.”

His firm took out the loan in 2019 with a maturity date of February 2020. After two extensions, Prime Manhattan entered into a forbearance agreement in August 2020, under which Urban Standard pushed off exercising its rights for another year.

The forbearance agreement was later extended to last May, but when the loan’s maturity date arrived, Prime Manhattan failed to come up with the money and Urban Standard put the loan into default.

The firm also had a $4 million subordinate mortgage on the property from Luxembourg-based Antares Bonds.