Supertall Developer Suing Lender To Stave Off Foreclosure
The developer behind the proposed Sutton Place supertall is suing his lender in an attempt to stave off foreclosure.
Bauhouse Group, which plans to build a 68-story condo tower on the site at 428-432 East 58th St, has defaulted on a $147M loan it received from Gamma Real Estate, controlled by investor N. Richard Kalikow.
Bauhouse is accusing the lender of rushing the foreclosure process and improperly dissuading bidders in an attempt to buy the property itself on the cheap, according to Crain's. The suit was filed Wednesday in state Supreme Court, and seeks an injunction that will prevent Gamma from moving forward with the foreclosure.
A delay could mean Bauhouse will be able to refinance and pay off Gamma. An appraisal by Cushman & Wakefield valued the property at $269M, and estimated the project's 113 ultra-luxe condos would sell for a total of $1.05B when they’re completed.
Gamma originally planned to hold the foreclosure auction on Feb. 10, but pushed it back due to complaints by Bauhouse. Gamma has demanded a $45M exit fee on top of its $147M loan, and is currently charging Bauhouse $100k a day in default interest. [Crain’s]