An article in crains.com today by Amanda Fung reports that, "in one week, Related Cos. is expected to take over the unsold units at Rector Square, beleaguered developer Yair Levy's failed Battery Park City condo conversion, according to sources."
"The developer will take over the residential tower's 232 unsold units, parking garage and commercial space directly from Anglo Irish Bank, the project's largest lender, for the bargain price of $82.8 million. That is the same price that the bank paid to take the property back at a foreclosure auction in November. Anglo, which was the only bidder at the auction, was owed roughly $135 million on the project, which is located at 225 Rector Place," the article said.
Related's move was anticipated, the article said, "since many had expected it to bid for the 304-unit property at the auction two months ago, but the developer did not step up. The company has been involved with the project since early last year when, during the foreclosure proceedings, it was appointed by Rector Square's receiver to manage the property."
In 2009, Mr. Levy's development firm, YL Real Estate Developers, defaulted on its $165 million mortgage on Rector Square and claimed, in its defense, that Anglo Irish did not comply with its loan obligations, which stalled the condo-conversion project.
"So far," the article continued, "only 72 units at the building have been sold. Meanwhile, 45 tenants at Rector Square are suing Mr. Levy and other parties involved in the botched condo conversion project for $100 million. Those tenants are anxiously awaiting the results of the auction. The decision on that lawsuit is still pending. When the deal closes, Related will have to decide whether to continue the conversion or maintain the unsold units as a rental property."
The article said that "Related has already contacted the New York state attorney general's office and expressed its intention to become the new sponsor of the development, sources said. The developer will formally apply to become Rector' Square's sponsor once the deal is closed."
The 23-story building, which was initially known as Parc Place, was erected in 1986 and designed by Gruzen Sampton Steinglass (now Gruzen Samton LLP) for the Related Companies, which sold the 306-unit property in 2005 to YL Real Estate Developers along with Columbus Green at 101 West 87th Street for $165 million.
Related had received tax breaks when it erected the building in exchange for making 20 percent of the units available for moderate-income tenants and in 2002 Related extended that protection to the year 2019 as an inducement for people to stay in the building after the terrorist attacks of September 11, 2001 as it was one of the closest in Battery Park City to Ground Zero.
After paying off a mortgage of the Housing Finance Agency, the new owner, Yair Levy, argued that the provision of rent controls for the moderate-income units no longer applied. While most of the market-rate tenants in the building vacated as their leases expired, the tenants in the moderate-income units remained.
The building has French windows, a doorman, a concierge, a garage, a roof deck, a residents' lounge with a screening room, a gym and a health club with swimming pool. The building's three lower floors are clad in limestone and the rest of the facades are clad in two-toned brick.
This large apartment building is quite elegant. It visually divides its mass quite successfully by having a handsome roofline with two "mini" peaks and by carrying the facade of the tower straight down to the entrance without being interrupted by two bandcourses and the cornice line of its wings, a simple but excellent design solution. This was described as "the most understated and most appropriately detailed of the Rector Park group" by Elliot Willensky and Norval White in their book, "The A.I.A. Guide to New York City, Third Edition," (Harcourt Brace Jovanovich, 1988).
"The developer will take over the residential tower's 232 unsold units, parking garage and commercial space directly from Anglo Irish Bank, the project's largest lender, for the bargain price of $82.8 million. That is the same price that the bank paid to take the property back at a foreclosure auction in November. Anglo, which was the only bidder at the auction, was owed roughly $135 million on the project, which is located at 225 Rector Place," the article said.
Related's move was anticipated, the article said, "since many had expected it to bid for the 304-unit property at the auction two months ago, but the developer did not step up. The company has been involved with the project since early last year when, during the foreclosure proceedings, it was appointed by Rector Square's receiver to manage the property."
In 2009, Mr. Levy's development firm, YL Real Estate Developers, defaulted on its $165 million mortgage on Rector Square and claimed, in its defense, that Anglo Irish did not comply with its loan obligations, which stalled the condo-conversion project.
"So far," the article continued, "only 72 units at the building have been sold. Meanwhile, 45 tenants at Rector Square are suing Mr. Levy and other parties involved in the botched condo conversion project for $100 million. Those tenants are anxiously awaiting the results of the auction. The decision on that lawsuit is still pending. When the deal closes, Related will have to decide whether to continue the conversion or maintain the unsold units as a rental property."
The article said that "Related has already contacted the New York state attorney general's office and expressed its intention to become the new sponsor of the development, sources said. The developer will formally apply to become Rector' Square's sponsor once the deal is closed."
The 23-story building, which was initially known as Parc Place, was erected in 1986 and designed by Gruzen Sampton Steinglass (now Gruzen Samton LLP) for the Related Companies, which sold the 306-unit property in 2005 to YL Real Estate Developers along with Columbus Green at 101 West 87th Street for $165 million.
Related had received tax breaks when it erected the building in exchange for making 20 percent of the units available for moderate-income tenants and in 2002 Related extended that protection to the year 2019 as an inducement for people to stay in the building after the terrorist attacks of September 11, 2001 as it was one of the closest in Battery Park City to Ground Zero.
After paying off a mortgage of the Housing Finance Agency, the new owner, Yair Levy, argued that the provision of rent controls for the moderate-income units no longer applied. While most of the market-rate tenants in the building vacated as their leases expired, the tenants in the moderate-income units remained.
The building has French windows, a doorman, a concierge, a garage, a roof deck, a residents' lounge with a screening room, a gym and a health club with swimming pool. The building's three lower floors are clad in limestone and the rest of the facades are clad in two-toned brick.
This large apartment building is quite elegant. It visually divides its mass quite successfully by having a handsome roofline with two "mini" peaks and by carrying the facade of the tower straight down to the entrance without being interrupted by two bandcourses and the cornice line of its wings, a simple but excellent design solution. This was described as "the most understated and most appropriately detailed of the Rector Park group" by Elliot Willensky and Norval White in their book, "The A.I.A. Guide to New York City, Third Edition," (Harcourt Brace Jovanovich, 1988).
Architecture Critic
Carter Horsley
Since 1997, Carter B. Horsley has been the editorial director of CityRealty. He began his journalistic career at The New York Times in 1961 where he spent 26 years as a reporter specializing in real estate & architectural news. In 1987, he became the architecture critic and real estate editor of The New York Post.
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