An investor with ties to Josh Schuster is dealing with his own set of problems, where pre-pandemic plans for a Park Slope rental project still haven’t come to fruition.
Hanover Capital filed a lawsuit against Claudio Soifer in state Supreme Court, alleging the investor backed out of a $21.7 million mortgage for 167 Fourth Avenue in the Brooklyn neighborhood, Crain’s reported. Hanover is suing for $218,000, as well as interest and legal fees.
An 18-story, 135-unit development on the corner of Degraw Street is at the center of the dispute. An affiliate of Soifer purchased the site, once consisting of three brownstones, in 2015 for $4.3 million. The site’s been vacant since 2019.
That year, Soifer filed plans for a 12-story, 57-unit condominium project. That’s since been swapped out for the rental development, which Urban Development Partners joined in on three years ago; that firm is not a party to the Hanover lawsuit.
Hanover alleges Soifer mailed a signed agreement for the mortgage in February, planning to retire existing debt. Soifer also supposedly planned to pay off Hanover’s mortgage within nine months with a construction loan.
It’s unclear when the loan was supposed to close, but by the beginning of June, Hanover was ready to battle, demanding a break-up fee from Soifer. The prospective lender claims it wasted “substantial time, effort and money” on the effort.
Soifer did not respond to the publication’s request for comment, nor did the co-founders of Hanover.
The development is expected to cost $140 million, according to Urban Development. Construction for the project is still months away beginning, Urban Development said, as the rental remains stuck.
Hanover was a prospective lender, but there have been problems with actual lenders, too. Bank Hapoalim provided $11 million in mortgages, while Hirshmark Capital issued $10.5 million in 2022. Two years ago, Hirshmark alleged Soifer defaulted and moved to foreclose before selling the debt to Naftali Credit Partners, which dropped the case.
Soifer’s real estate ties also involve Silverback Development founder Josh Schuster, who pleaded guilty this year to a Ponzi-like scheme after stealing more than $10 million from investors.
After meeting in 2016, the two signed a joint venture agreement to develop three lots at the corner of Second Avenue and East 21st Street in Manhattan into a 13-story condo building with 56 apartments. Things fell apart in the following years, forcing Soifer to remove Schuster from the project, which was thrown into chaos.