Apparently Passaic is not the hot real estate market Joseph and Meyer Chetrit thought it would be.
ConnectOne Bank has sued the Chetrits, alleging their company failed to make payments on a $23.4 million construction loan to convert a former hospital to a six-story, 148-unit multifamily building.
The Chetrits bought the one-time home of St. Mary’s Hospital at 199-231 Pennington Avenue in 2012 for $6.5 million, according to New Jersey property records.
The bank alleges the Chetrits missed their loan payment in November and failed to pay the loan’s balance by its maturity in December.
Its lawsuit in New Jersey Supreme Court alleges the Chetrits also failed to pay property taxes during the fourth quarter of 2023 and the first quarter of this year. The bank pointed to additional liens on the property, including a $4.7 million construction lien.
Meyer Chetrit has a personal guarantee on the loan, the lawsuit alleges.
ConnectOne recently sought to have a receiver appointed for the property. A source said ConnectOne is seeking to sell the loan, potentially allowing a buyer to come in and foreclose on the property.
The Chetrits have not yet responded to the allegations in the suit.
Passaic’s population shot up 29 percent from 1980 to 2000, and even though its growth slowed in the next two decades, it was still the fastest growing city in New Jersey in that time. However, it lost residents during the pandemic and now has about 70,000 people.
The Chetrit Group is among the largest landlords in the metro area. Last year it ranked as The Real Deal’s largest residential developer in New York City with 2,156 units under construction.
But tracking the Chetrit Group’s real estate holdings is challenging because its portfolio is vast and properties are held by various members of the family.
Last fall the group secured a $235 million loan for a residential project on the Upper East Side and paid $32 million for a building at 1009 Park Avenue.
At the same time, Chetrit flirted with default on a $481 million loan covering 43 properties across the country.
Chetrit is also in a legal fight with Maverick Real Estate Partners. The distress lender foreclosed on Chetrit’s hotel near Penn Station. Chetrit, in turn, alleged in a lawsuit that Maverick stole more than $20 million from the 34th Street project.
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