Moinian Group Faces Pre-Foreclosure Action in FiDi

The Moinian Group is facing the threat of foreclosure at a luxury rental building in the Financial District after a years-long battle with the property’s fee holder.

Fannie Mae alleges Moinian is in default on a $74.8 million loan provided to the developer at 90 Washington Street, PincusCo reported. The loan is secured by the ground leasehold at the 397-unit property, according to the pre-foreclosure action filed by the lender.

Fannie Mae claims Moinian defaulted three times on the loan, which has not yet matured. The alleged defaults are instead tied to liens and poor property maintenance, according to the complaint.

An unrepaired facade seems to be at the core of the issue. Joseph Moinian and the fee owner, the Katz family, have been battling for years after the former allegedly failed to complete facade repairs required after the city issued a violation in 2011. Since then, Moinian has filed multiple cases to prevent Katz from terminating the ground lease.

After the violation, Moinian started to replace the property’s bricks before shifting to facade recladding, according to litigation. The Katz family issued a default notice seven years later, claiming Moinian was not keeping the facade in good condition.

The facade remains incomplete today, according to Fannie Mae’s suit, which claims a court ruled in September that Moinian was in default of the 99-year ground lease over the issue. Katz notified Fannie Mae in September that there were 60 days to cure the issue, according to the suit, and Fannie Mae informed Moinian of the loan default in November.

Moinian did not immediately respond to a request for comment from The Real Deal. The developer has owned the property’s ground lease since 2003, when it purchased it from Tamir Sapir for $35 million.

There are three units available at the 27-story rental building, according to StreetEasy, starting at $4,000. Amenities at the property include a gym, a resident lounge and a rooftop.

Moinian recently landed a $111 million construction loan from MSD Partners for a 250-unit project at 3 Platt Street, which is also in the Financial District.

— Holden Walter-Warner