ING Real Estate Finance and Swedbank are reported to have begun foreclosure proceedings against the planned, 709-foot-high, Shangri-La Hotel and residential condominium project at 610 Lexington Avenue on the southwest corner at 53rd Street

The 68-story mixed-use project was designed by Sir Norman Foster for Aby Rosen's RFR Holding company and according to an article by Adam Pincus in this afternoon's on-line edition of The Real Deal magazine the lenders "have filed to foreclose on $144.2 million in loans and fees used to buy, plan and develop the site, court records say."

"The original $145 million loan issued by Lehman Brothers Holdings in April 2007 to the RFR affiliate," the article continued, "was composed of a $98.64 million acquisition loan; a project loan of $19.3 million for pre-developments costs; and a building loan of $27 million to fund demolition and construction costs, the court filing says. The note had an original repayment date of October 8, 2008, with an option to extend to April 8. That loan was transferred in stages from Lehman Brothers and related entities to ING Real Estate Finance, a division of the Dutch ING Group; and the Swedish Swedbank, in a shift that was completed by November 2008."

The June 16 filing indicated that the developer was "unable to refinance its loan by an April 8 deadline, and so ING determined the loan was in default on June 15, the filing says."

In April, Crain's reported that Shangri-La had pulled out of managing the hotel portion of the project.

The building site was formerly occupied by the home of the YWCA and that was recently demolished.

The site is behind the Seagram Building at 375 Park Avenue and the city's Landmarks Preservation Commission approved a transfer of air rights to the project that also got a special permit waiving height and setback regulations. RFR Holdings, of which Mr. Rosen and Michael Fuchs are partners, own the Seagram Building and Lever House, two major New York City landmarks of modern architecture, and they have developed numerous buildings in the city in recent years.

When the initial application was approved by the commission last fall, Mr. Rosen, one of the principals of RFR Realty LLC, said that the building will contain 80 to 90 condominium apartments and 45 to 50 hotel rooms.

The revised plan called for only 17 apartments, which would have been on the top 11 floors of the tower, and 207 hotel rooms, a reflection of the crowded residential condominium market and the high demand for hotel rooms especially in midtown.

The new tower would only utilize about 90 percent of the available air rights from the Seagram Building, which only occupies 52 percent of its site and is widely regarded as an icon of modern architecture that was also very influential in the widespread use of plazas in city zoning.

The developers had pledged to restore and maintain the landmark Seagram Building and establish a covenant with the New York Landmarks Conservancy, a civic organization, to that effect.

The presentation before the commission emphasized that the new tower would not be visible from street-level from directly across Park Avenue from the Seagram Building.

Mr. Foster told the commission that the new tower rise without setbacks and be only 90 by 46 feet in plan.

Mr. Foster is also the architect for another Aby Rosen project, the redevelopment of the former Parke-Bernet Building at 980 Madison Avenue. Two of his designs for that project, however, have been rejected by the landmarks commission.

Foster and Partners designed the new notched tower addition to the Hearst Building on the southeast corner of Eighth Avenue and 57th Street. Sir Norman Foster is widely regarded as one of the world's foremost "high-tech" architects and his famous projects include the Sainsbury Centre for Visual Arts in England, the Hongkong and Shanghai Bank Headquarters in Hong Kong, and the Great Court at the British Museum in London.