One building wipes out another in Tribeca

A Tribeca multifamily owner says a luxury rental project next door rendered his six-story building uninhabitable.

But in a curious twist, that was something the owner planned anyway: He has spent years trying to clear out rent-stabilized tenants, demolish his building and build pricey rentals himself.

Charles Dayan’s Bonjour Capital controls 59 Franklin Street through an LLC, which last week sued Hap Investments and Noble Construction Group, claiming negligent work at 65 Franklin Street — aka 360 Broadway — destabilized the building. He is seeking at least $15 million.

The damages forced the few remaining tenants to move out, leaving the owner unable to lease or use any portion of the 12-unit building, Bonjour’s LLC alleged in court documents.

But a former occupant told The Real Deal that Bonjour began buying out rent-stabilized tenants long ago to replace the building with a market-rate high-rise.

Julia Heyward, a performance artist, had been living in the building for four decades when her lease and nine others were bought out by Bonjour around 2018. That would have left just two tenants.

Heyward said the facade was blemished long before Hap began drilling next door.

“If you looked at the east wall, it looked like a wedding cake,” said Heyward, who now lives in California. “That was always worrisome.”

Hap bought 65 Franklin Street, formerly a mixed-use five-story apartment building with a ground-floor pizza and burger joint, in 2018 for $46 million. It plans a 19-story condominium with 41 apartments and ground-floor retail. But five years later, nothing has risen there.

Bonjour Capital’s building next door at 59 Franklin, also known as 358 Broadway, has had a tumultuous history itself. Marshall Weisman of W Developers defaulted on $22.75 million in loans at the property in 2009. A foreclosure auction was scheduled in 2012 with the debt at $26.8 million and Bonjour’s Dayan bought it for $12.6 million.

Two years later he filed plans to build an 18-story, 89,000-square-foot building with 89 luxury rentals.

Nearly a decade has passed since, and the old building is hanging on. According to court filings, Bonjour Capital intends to buy out the remaining tenants and demolish the building “in the near future.” Demolition plans were approved last year, according to Tribeca Citizen.

Rather than wait for its immediate neighbor to come down, Hap proceeded with its condo project at 65 Franklin Street. The two owners reached an access agreement after a series of issues at Hap’s construction site. Cracks in 59 Franklin Street were observed in March 2022 and the Department of Buildings issued a stop-work order in December after the contractor withdrew from Hap’s project.

Hap agreed to incur all costs to stabilize the adjacent building, even offering to pay the $70,000 license fee, and engineers for the two owners agreed on a plan that did not require underpinning — only pile brackets and grade beams. The Department of Buildings signed off.

The deal didn’t go according to plan. Dayan alleged in court filings that Hap failed to repair damages, pay license fees or vacate the property on schedule.

Despite their conflicts, the two owners’ interests seem to be aligned: Both would benefit from demolition of 59 Franklin. Hap could build its condominium without having to prop up its decrepit neighbor, and Bonjour could replace its small, mostly empty, rent-stabilized building with a lucrative project of its own — or sell the land for a handsome profit.

But there are property rights to be defended, damages to be won and lawyers to be paid, so the litigation continues.

“The current condition of 358 Broadway presents a safety risk to the public,” Hap said in court documents, adding that it sought to stabilize the building to “resolve the public safety concern, prevent a possible catastrophe and avoid further delays to the project.”

In June, a judge ordered Bonjour’s LLC to permit Hap on site to do the stabilization work for 24 months.

Neither side could be reached for comment.

Read more

New York

Tribeca mixed-use building scheduled to hit foreclosure auction block

New York

Charles Dayan to build luxury rentals at foreclosed Tribeca site

New York

HAP Investments buys Tribeca site for its next condo project