The troubles for Sutton Place's planned 900-foot tower just keep on growing. On Wednesday, Crain's reported that the Bauhouse Group-developed building proposed for East 58th Street would likely be auctioned on February 29th this year for failing to pay it's loan of $147 million to Gamma Real Estate. Today the publication reports that the Bauhouse Group is suing the lender for rushing through the foreclosure process, and structuring the loan in such a way that the developer was bound to have difficulties. The legal action on part of the developer is seen as a way to delay the pending foreclosure so it can either the sell the property or acquire a construction loan to pay off Gamma Real Estate, according to Crain's.
If the foreclosure auction takes place later this month, Gamma can either take control of the property or hand it off to someone who is willing to pay more than the debt amount.
Bauhouse purchased three adjacent properties on East 58th Street last year for $40 million along with the development rights for the building at 426 East 58th Street. The developer acquired a loan totaling $147.25 million to complete the purchase and to fund other requirements related to the project. Bauhouse was supposed to secure a construction loan that would help pay off the loan from Gamma, but that hasn't come through and as a result the terms of the loan expired in January and went into default.
The foreclosure auction was earlier scheduled for February 10, according to Crain's but that has now been pushed back to the 29th. Since the loan went into default Gamma has also been charging the developer $100,000 per day in interest.
Bauhouse asked Cushman & Wakefield, another real estate company, to do an appraisal of the site. The results: the entire parcel is valued at over $269 million and the sale of the 113 planned condos at 68-story building would be worth $1.045 billion, the lawsuit Bauhouse filed against Gamma revealed.
Lender on controversial Manhattan condo tower project to hold foreclosure auction [Crain's]
· Developer of maligned supertower sues to stave off foreclosure [Crain's]
· 900-Foot Sutton Place Tower Will Get Major Height Cut: Sources [Curbed]
· Bauhouse's Sutton Place Tower At Risk Of Foreclosure: Sources [Curbed]