The SHoP-designed building on 111 W. 57th Street has only been built up to 20 stories and is already $50 million over budget. Real estate investment corporation AmBase filed a lawsuit in the Manhattan Supreme Court against the project’s developers and the lender over construction cost overruns.
AmBase, which had invested over $70 million into the building, blamed sponsors Kevin Maloney and Michael Stern, as well as Spruce Capital Partners.
“Apparently they omitted some very significant items in their budget including cranes, which are very expensive in New York and can run into the millions of dollars,” AmBase’s attorney Stephen Meister said to the Post.
Maloney, Stern, and AmBase had defaulted on a $25 million mezzanine loan from Spruce Capital Partners in June, according to the Post. The proposed mezzanine loan would allow the lender (Spruce) to take control of the asset in a default situation.
But on Wednesday, a judge enforced a strict foreclosure procedure, blocking Spruce from taking ownership of the project. If Spruce puts the building up for foreclosure, however, AmBase could potentially get back some of its $70 million investment.
An earlier report by The Real Deal revealed that the developers were facing a $100 million cash deficit and that AmBase already sued the developers last year, alleging that they were trying to “dilute its stake” in the project.
The building was meant to rise 1,400 feet, or 82 stories. It made headlines as the world’s most slender building, with a height-to-width ratio of 24:1 and a floor plate measuring 60 feet by 80 feet.
111 W. 57th Street is not the only building on the oversaturated Billionaire’s Row in trouble. A penthouse apartment at One57 on 157 W. 57th Street, the supertall that started it all, is awaiting its foreclosure auction.