A number of notable landlords and developers found themselves in trouble in New York this week.
Steve Croman is combating more than 28 active foreclosure lawsuits targeting properties he controls. In total, lenders allege Croman’s entities defaulted on more than $231 million in loan principals.
Twenty-one of the foreclosure suits were filed in the last week, many zby lender Orange Owner LLC. The principal of those associated loans totals more than $189 million
In a court filing, Croman denied many of the allegations.
But it’s just the latest issue for the man once dubbed the city’s worst landlord, who served an eight-month stint for mortgage and tax fraud and was sued over the summer by his own father.
Croman’s not the only real estate figure involved in a difficult family affair. The Ostad brothers, a trio of New York real estate investors, were named as defendants in nine foreclosure suits related to loans totaling more than $70 million.
The brothers stopped making payments on the loans in April, according to the plaintiff. That’s the same month that Michael and Edward sued Steven, hoping to dissolve their family partnerships; Steven is only named in three of the cases, while his brothers are named in all of them.
The older Ostad brothers lead fix-and-flip lender Flatiron Realty Capital. Steven is the founder of residential brokerage Empire City Realty and lender Real Quick Capital, though both appear to be closed.
No stranger to his only family drama, Alex Sapir is in the midst of the messy process to wind down his business.
Sapir Corp placed its Nomo Soho hotel into Chapter 11, the latest development in the ongoing collapse and liquidation of the Israeli-backed real estate company.
The firm is seeking to run a court-supervised auction for the 26-story boutique hotel at 9 Crosby Street. Its petition is designed to cement a sale and pay down Sapir Corp’s $155 million in bond debt across two Israeli bond series.
The bankruptcy filing comes three weeks after Sapir entered insolvency proceedings in Israel, where the company told the Tel Aviv-Jaffa District Court it could no longer meet bond payments or cover operating costs. All of its directors resigned and a trustee is overseeing the company as it winds down.
Elsewhere in the city, Manhattan’s favorite contested sculpture garden was back in the news this week, courtesy of a feud between the outgoing and incoming mayors.
The would-be developers of the Haven Green affordable housing complex at the Elizabeth Street Garden sued the city, claiming the mayor illegally dedicated the site as a city park.
Pennrose, Riseboro and Habitat for Humanity New York City and Westchester, who were chosen in 2017 to build 123 senior housing units on the city-owned site, filed a lawsuit on Wednesday.
They want the court to annul the parkland designation.
Ahead of the November election, Mayor-elect Zohran Mamdani indicated that he would move forward with Haven Green and evict the garden. After the Adams administration declared the land a park, Mamdani told reporters that pursuing the project would be “nearly impossible,” as using city parkland for other uses would require action by the state legislature.
Perhaps the lawsuit makes it a little less impossible.
Finally, when the city began its search for developers of a site in the Meatpacking District, the request for proposals encouraged — but did not mandate — the inclusion of an “emerging developer.”
The RFP described a candidate that had completed fewer than 10 projects in the past decade, each with fewer than 150 residential units, no more than 100,000 square feet and a cost below $30 million. Simple enough.
So the EDC selected Kinwood Partners — alongside Douglaston Development — to build 590 housing units on a city-owned site.
Kinwood hasn’t developed anything, so all good, right?
Well, it’s led by someone — David Himmel — who spent a decade working for a major real estate firm as well as on projects in the neighborhood. Himmel is the former chief operating officer at Jamestown and son of Leslie Wohlman Himmel, co-founder of investment firm Himmel & Meringoff Properties.
Naturally, the firm’s selection raised questions about the intent of designations like “emerging developer” in public-private endeavors.
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Steve Croman defaulted on $231 million in principal, lenders allege
Ostad brothers face foreclosure suits over $70M in loans
Sapir Corp puts Nomo Soho into bankruptcy, prepares for liquidation