The Related Cos. and the Deutsche Bank rejected a $258.55 million check from SL Green Realty Trust and Joseph Moinian to settle a foreclosure case by yesterday's 5PM deadline, according to an article in today's edition of The New York Post by Lois Weiss.
Mr. Moinian, who recently partnered with SL Green to pay off the mortgage, stopped making mortgage payments in January on the office building's loan in the middle of a major renovation and while negotiating a refinancing.
The loan had been sold by Deutsche Bank to Related with Deutsche Bank loaning Related, which is headed by Stephen M. Ross, the money to buy the loan, according to the article, which noted that "After Moinian defaulted, the bank accelerated the loan payment, but Moinian's attorney, Stephen Meister, claims under the mortgage language, no prepayment penalty is due if the loan was accelerated.
"I just got the check back," Meister told The Post. "We will be moving for summary judgment that they are not owed the $54 million prepayment penalty," the article said, adding that "Litigation over a $54 million prepayment penalty demanded by the lenders will continue while they forego $70,000 in interest each day."
Mr. Moinian had filed suit October in State Supreme Court in Manhattan against his lender and Mr. Ross for a "long-lived predatory lending scheme designed to steal the building, known as 3 Columbus Circle, for a fraction of what it was worth," according to an article in the October 27, 2010 edition of The New York Times by Charles V. Bagli.
Related had bought the mortgage on the recently reclad building now being renovated at 1775 Broadway in September and planned to demolish it and replace it with "a sleek skyscraper slightly taller than his 750-foot, two-towered Time Warner Center" just across Eighth Avenue and 58th Street, the article said.
Mr. Moinian does have assurances from SL Green, the article by Mr. Bagli said, "that it will provide a new $250 million mortgage and have an equity stake in the property, if and when the Related mortgage is paid off."
Mr. Moinian bought the building, which was once the home to Newsweek magazine, in 2004 and refinanced the property two years later, borrowing $250 million from Wachovia, the article said.
Mr. Ross, the article said, has indicated that "he planned to put a Nordstrom department store in the base of a new skyscraper designed by a famous architect, with about 140 condominiums on the upper floors.
Mr. Moinian, who recently partnered with SL Green to pay off the mortgage, stopped making mortgage payments in January on the office building's loan in the middle of a major renovation and while negotiating a refinancing.
The loan had been sold by Deutsche Bank to Related with Deutsche Bank loaning Related, which is headed by Stephen M. Ross, the money to buy the loan, according to the article, which noted that "After Moinian defaulted, the bank accelerated the loan payment, but Moinian's attorney, Stephen Meister, claims under the mortgage language, no prepayment penalty is due if the loan was accelerated.
"I just got the check back," Meister told The Post. "We will be moving for summary judgment that they are not owed the $54 million prepayment penalty," the article said, adding that "Litigation over a $54 million prepayment penalty demanded by the lenders will continue while they forego $70,000 in interest each day."
Mr. Moinian had filed suit October in State Supreme Court in Manhattan against his lender and Mr. Ross for a "long-lived predatory lending scheme designed to steal the building, known as 3 Columbus Circle, for a fraction of what it was worth," according to an article in the October 27, 2010 edition of The New York Times by Charles V. Bagli.
Related had bought the mortgage on the recently reclad building now being renovated at 1775 Broadway in September and planned to demolish it and replace it with "a sleek skyscraper slightly taller than his 750-foot, two-towered Time Warner Center" just across Eighth Avenue and 58th Street, the article said.
Mr. Moinian does have assurances from SL Green, the article by Mr. Bagli said, "that it will provide a new $250 million mortgage and have an equity stake in the property, if and when the Related mortgage is paid off."
Mr. Moinian bought the building, which was once the home to Newsweek magazine, in 2004 and refinanced the property two years later, borrowing $250 million from Wachovia, the article said.
Mr. Ross, the article said, has indicated that "he planned to put a Nordstrom department store in the base of a new skyscraper designed by a famous architect, with about 140 condominiums on the upper floors.
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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