Gamma Real Estate is making moves to foreclose on Bauhouse Group’s troubled supertall planned for Sutton Place.
Bauhouse’s $128.8 million in loans expired last month, spurring the lender, Gamma, to begin the process of seizing 426-432 E. 58th Street, Crain’s reported. The developer argues that foreclosure is premature.
“The lender’s flawed and incomplete legal steps to rush the auction are commercially unreasonable and will not withstand judicial scrutiny,” Bauhouse said in a statement. Joseph Beninati’s company also claimed there are “multiple sources of capital competing for the opportunity to finance the next round of the Sutton Place development and pay off the existing lender’s full principal and interest.”
News of a possible foreclosure comes as Bauhouse is seeking an additional $80 million mezzanine loan to fund the residential project. Last week, The Real Deal reported that the Carlton Group was trying to arrange financing.
The tower — known as 3 Sutton Place — has also drawn fierce community opposition for its height, which is now at 68 stories, down from its initially planned 80 stories. An opposition group, the East River Fifties Alliance, recently filed an application with the Department of City Planning to impose a building height limit in the area to prevent the project. [Crain’s] — Kathryn Brenzel
Source: The Real Deal