Witkoff Reportedly Leading Group Circling Debt On Stalled HFZ Chelsea Condo Project
Real estate investor Steven Witkoff is said to be leading a group angling to buy the billion-dollar debt on HFZ Capital Group’s troubled West Side condominium project.
There is $1.2B in debt hanging over the Bjarke Ingles-designed project, dubbed the XI, the New York Post reports. All work stopped on the development 20 months ago, and HFZ’s Ziel Feldman defaulted on the $2B project last summer.
An auction to sell the debt will be held after the project's UK-based lender, Children’s Investment Fund, sued over unpaid interest payments. The auction, originally set for October, has been postponed until next month, per the Post.
“There was a ton of interest in XI,” an unnamed source told the Post of the auction. “A lot of things have to happen first, but Witkoff came out of it holding the pole position. ... Controlling the debt is the same as controlling the property, whether it’s Witkoff or anyone else.”
It has been a challenging time for HFZ as it battles lawsuits from buyers, lenders and creditors. In April, Feldman launched a lawsuit against his former business partner, alleging he fraudulently diverted company funds to himself through credit card reimbursements and wire transfers.
Earlier this year, HFZ lost control of its condo at 255 East 86th St. after its partner, Westbrook Partners, took over the development. In 2019, an executive at HFZ faced charges of fraud after he was allegedly bought off by members of the notorious Gambino crime family.
If the XI towers are completed, bringing their twisting twin towers to fruition, the project is expected to feature a Six Senses Resort and Spa.