Construction Halted At Leaning Seaport Condo Tower Amid Legal Dispute Over Loan
Fortis Property Group is facing more problems at its challenged apartment project in Lower Manhattan, with the developer now locked in a battle with its lenders over construction financing.
A group of lenders, led by Israeli Bank Leumi's U.S. affiliate, claims $120M it provided four years ago for the development at 161 Maiden Lane is now delinquent, The Real Deal reports. Newmark Knight Frank has been engaged to sell the loan.
Meanwhile, Fortis has taken legal action against the lenders in a state lawsuit, alleging they haven't been paying out on the loan since March last year, even though they were contractually bound to pay another $30M.
Fortis claims it put $20M of equity into the project and renegotiated terms with the lenders, reaching a deal they would pay out even if the budget and timeline blew out. However, the lenders blame Fortis for the myriad problems at the site and argue they don't need to meet their payment obligations because Fortis hasn't yet secured a temporary certificate of occupancy, which was a condition of providing the rest of the loan.
Bank Leumi USA has argued in court documents that buyers’ contracts on apartments in the 60-story building fell apart because of Fortis’ failure to complete the property on time. Construction has now stopped, per TRD.
Last year, contractor Pizzarotti sued Fortis, claiming the tower was leaning 3 inches north. Pizzarotti had overseen construction since 2015 and claimed poorly executed foundation work done before it joined the project is causing the problem. The suit led to the nickname "The Leaning Tower of the Seaport" for the project.