2021-01-03 — therealdeal.com
Many developers saddled with unsold units in a sluggish market are in a tight spot. HFZ, however, may be the first big Manhattan developer in the Covid era at risk of losing it all. Its investors and lenders have sued to collect more than $300 million, liens from contractors and vendors are piling up, and at the firm's flagship project -- the Bjarke Ingels--designed XI condo and hotel spanning a full city block along the High Line -- sales are slow and construction has stalled. [co-founder] Feldman and his wife, Helene, are personally on the hook for many of the loans tied to these projects.
But now, with the principal on the loan coming due in a year and signs pointing to HFZ not being able to pay it, Children's [Investment Fund, a U.K.--based hedge fund which provided the $1.25 bln construction loan] is looking for a developer to replace HFZ on the project, according to two people familiar with the matter. The lender has already held talks with at least one prominent New York developer about getting the project over the line, the people added. (The lender would need to file a foreclosure action or get HFZ to agree to work with another developer, according to a lawyer with experience in this area.) Children's declined to comment.
The project was recently embroiled in a mob scandal in which members of the Gambino crime family allegedly bought off an HFZ executive so they could skim hundreds of thousands of dollars from it and other Manhattan projects. (Neither Feldman nor Meir was implicated; the executive pleaded not guilty, and the case is ongoing.)
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