Foreclosure initiated against project at 241 Fifth Avenue

Inland Mortgage Capital filed suit this week to foreclose on 241 Fifth Avenue Hotel, a 19-story, 100-unit project that was initially planned as a 76-unit residential condominium building, according to an article today by David Jones at therealdeal.com.

The developers of the hotel project, Dan Shavolian and Jack Hazan, acquired the property in 2007 for $26.5 million from Avraham Sibony, who had bought it in 2005 for $10.8 million.

The property is between 27th and 28th Streets and Mr. Shavolian and Mr. Hazan retained the original plans for Mr. Sibony by Eran Chan of Perkins Eastman Architects that had been approved by the Landmarks Perservation Commission as the property lies within the Madison Avenue North Historic District.

According to the article, the developers defaulted on $27.2 million including $22.75 million in loans, interest and penalties. The developer, it continued, "took out a $7 million mortgage in 2005 and a $15.9 million gap mortgage in 2007, which was later consolidated and restated into the aforementioned $22.75 million in loans. That same year, Shavolian, Hazan, investor Al Cohen and Los Angeles real estate investor Ezri Namvar, entered agreements to guarantee the loan, according to the complaint. Namvar, chairman of Namco Capital Group, allegedly stole hundreds of millions of dollars invested by the Persian Jewish community in Los Angeles, according to published reports, and the Inland Mortgage complaint notes that his creditors pushed him into involuntary Chapter 11 bankruptcy protection in December 2008."

Chan's design had been described by many of the landmarks commission's members as s "intriguing" and "interesting" and it employed four materials: a "rainscreen" terracotta system, an opaque baked and painted glass, clear glass and silver-colored metal panel coping. The planned building would have had a symmetrical facade on the avenue but an asymmetrical facade on its south "party" wall, which has considerable exposure. In addition, it "floats" its setback upper floors in a form that a couple of commissioners described by "Cubist."

Mr. Chen of Perkins Eastman said that the design attempts to make a meaningful transition between a higher building just to its north and the 7-story building just to its south and the 5-story Museum of Sex on the northeast corner at 27th Street.

Commissioner Richard Olcott said at the commission's hearing that he found the design "quite intriguing" and "lively" and that "it seems like the building wishes it was not standing at mid-block." Commissioner Stephen Brynes added that he found the "vaporization" of windows on the south facade "provocative."