Sam Boymelgreen’s landlord faces foreclosure at Gowanus property

Akkad family defaulted on $11M mortgage, forcing Cathay to take action

255 Butler Street and Sam Boymelgreen
255 Butler Street and Sam Boymelgreen (LoopNet)

The nightmare isn’t over yet for Sam Boymelgreen’s Gowanus project. 

Weeks after the son of controversial developer Jeshayahu “Shaya” Boymelgreen, won a $36 million judgment against his landlord at 255 Butler Street — Cathay Bank filed an $8 million pre-foreclosure action.

The landlord group of the 99,500-square-foot space, 255 Butler LLC, includes family members Ariel Akkad, Nathan Akkad, Solomon Akkad and Benjamin Akkad.

Cathay originally signed off on an $11 million mortgage to the Akkad family in 2013, according to a complaint, but they defaulted on loan repayments shortly after the judgment was declared. 

After failing to make their monthly payment in early April, the group received a notice on April 17 that the remainder of the loan was due effective immediately, according to court documents.

The legal battle began eight years ago, when Boymelgreen signed a 49-year lease agreement with 255 Butler LLC.

When the relatives discovered that Boymelgreen had penned an arrangement with coworking giant WeWork rather than fulfill his initial proposal of developing a hotel space at the warehouse site, the family looked to cut him out of the deal, treating him as an unnecessary middle man.

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It’s unclear what the possible foreclosure means for the junior Boymelgreen and his lease.

Neither Boymelgreen nor the Akkad family could be reached for comment.

Boymelgreen has run into a series of troubles at the property while attempting to strike out on his own as a developer and make a name for himself away from his father’s notorious legacy.

At the peak of his company, Shaya Boymelgreen’s family business managed more than 200 employees and an $8 billion portfolio with properties in New York, Miami, Las Vegas, Israel and Eastern Europe.

In the mid-2000s the elder Boymelgreen also masterminded the creation of a bank, LibertyPointe Bank, which survived the 2008 recession but crumbled just two years later after state and federal regulators claimed it was operating with an excessive amount of commercial real estate loans.

In 2016, the prolific developer was slapped with a two-year ban from selling condos in New York. The unusual punishment was a part of a settlement with the state Attorney General’s office over claims that he refused to fix faulty construction at half a dozen Manhattan and Brooklyn properties he developed.

Since then, Shaya has turned most of his attention toward building out his company in Miami Beach, where he’s developing an eight-story, 50-unit boutique condo development called 42 Pine.

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