The family of Taiwanese artist Dr. Tsing-Fang Chen is suing the lender and contractor on a failed Garment District condo conversion for a total of more than $3 billion.
An entity controlled by the Chen family filed two separate lawsuits in bankruptcy court last week against Shanghai Commercial Bank and Milestone Construction Corp., claiming fraud and negligence, and blaming them for stalling construction at 335 West 35th Street.
The lawsuits are the latest chapter in the yearslong saga related to the conversion of the office and industrial building to fancy condos. The Chens are seeking $1.5 billion from the bank and $1.6 billion from Milestone in compensatory, punitive and other damages.
The family bought the vacant, 12-story building near Penn Station for $50 million in 2016, planning to redevelop it. The plan was for condo units, to be sold for a collective $99 million, and space for the family foundation’s T.F. Chen Cultural Center.
Shanghai Commercial Bank agreed to lend the Chens $34 million in 2017, consolidating earlier loans and setting a December 2021 maturation date. The first sign of trouble surfaced in 2021, when the developer sued a loan broker it had retained for failing to close on $82 million in new financing from a South Korean firm in 2020.
Shanghai Commercial Bank refinanced the condo project in November 2020 for $60.6 million. But eventually it refused to keep funding the endeavor, the Chens allege.
In January, the family put the entity that owns the building into bankruptcy as it sought funding to complete the project. Meanwhile, construction remains stalled at 75 percent complete.
The Chens hired Milestone in 2020 to finish the project and agreed on a maximum construction cost of just over $11 million, according to the suit. The contractor went over that budget and misused construction funds, failed to pay subcontractors and caused mold growth in the building from water infiltration, the suit against Milestone alleges.
In the complaint against Shanghai Commercial Bank, the Chens claim the bank held back funding, misrepresented line items and improperly took control of the project, resulting in significant financial losses and delays.
A spokesperson for the law firm representing the bank did not immediately respond to a request for comment. A lawyer for the contractor declined to comment.
“The Chen family has taken bold and decisive action,” attorney Leo Jacobs said in a statement. “It is time to redefine the victim. Stay tuned.”
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