East River Fifties residents and ERFA members Gail Wasserman and Jennifer Crandall have been leading our tabling efforts around the neighborhood. They are the smiling faces that distribute information and answer questions about ERFA’s plan and its progress. We asked them about the most common questions and misconceptions. Here’s what the ladies said:
What is the biggest misconception that you keep hearing?
People think that the former developer’s bankruptcy and foreclosure struggle means that there is no longer any danger of the E 58th St. building being built.
Foreclosure on a loan only means that the property would be transferred to another owner via an auction conducted by the lender. Another developer could take over the project and plan an equally tall building, perhaps with greater ability than the Bauhouse Group to see the project through to completion. Although the bankruptcy proceeding has caused a temporary delay, it could be resolved at any time and the project could rapidly move forward with a very able developer. The antiquated zoning laws that allow megatowers in our residential neighborhood would still exist and continue to be a threat in the future. ERFA’s rezoning plan, if successful, will ensure that this site and others in the East River Fifties community will no longer permit such towers.
Most asked question:
Do you really think you can win?
Yes! Not only do we have an energized and involved community and a rezoning plan that exemplifies everything that the City says it wants, we also have four elected officials (Manhattan Borough President Gale A. Brewer, City Council Members Ben Kallos and Dan Garodnick, and State Senator Liz Krueger) that actually co-filed our plan with us at the Department of City Planning.
The East River Fifties community is angry that this may happen in the Sutton neighborhood as well as elsewhere in the City. People are energized and committed to getting the rezoning accomplished.
Thank you again to Gail Wasserman and Jennifer Crandall for their continued hard work on this cause. You can find them at their next tabling event on June 16th at Cathedral High School (across the street from Le Pain Quotidien) on 1st Avenue and 56th Street.
Meanwhile, you can read our full FAQ here, or ask us something else by sending an email to email@example.com.
Once again, ERFA’s President, Alan Kersh, was featured in the news: this time, in The Wall Street Journal. The WSJ looked into the bankruptcy/foreclosure battle between the developer Bauhouse and its lenders, and spoke with him about the project.
Controversy over the project started as soon as its existence became public in March 2015…
The Sutton Place tower’s sheer scale—with 78 floors it would reach far higher than surrounding buildings—and location in the middle of a narrow residential street not far from Billionaire’s Row, drew immediate backlash from the community.
“It caught everyone by surprise,” said Alan Kersh, president of the East River 50s Alliance, which has been fighting the tower since it was first proposed last year, calling it “wickedly out of character and out of scale with our neighborhood.”
This megatower is not a done deal. We keep repeating this because it’s still true. Much as Bauhouse Group likes to boast that its megatower will go up, regardless of community wishes or zoning changes, there are signs that the construction of the development is far from ensured. The developer claims that our proposed zoning change cannot possibly pass through all the needed governmental approvals before the building goes up, but Bauhouse still doesn’t have the money it needs for the project. In fact, it owes a debt of $128.8 million to Gamma Real Estate, which is taking steps to foreclose on it. You can read more about the impending foreclosure in our latest news post.
Crain’s, The Real Deal, and Curbed all recently reported that not only is the Bauhouse Group having trouble funding the Sutton Place project, but Gamma Real Estate, which already lent the developer $128.8 million is taking steps to foreclose on their debt. All three articles mentioned ERFA and our rezoning plan to stop the development.
The developer of a proposed supertall condo tower in Sutton Place that has drawn opposition from residents in the tony Manhattan neighborhood is facing foreclosure by one of its lenders.
Gamma Real Estate, a real estate investment and lending firm operated by N. Richard Kalikow, has started to take steps to seize the project, located at 426-432 E. 58th Street and owned by Bauhouse Group.
Gamma holds as much as $128.8 million in loans against the property, according to both its website and city property records, including mezzanine debt—loans that some developers obtain on top of a senior mortgage. The debt can be risky because they allow lenders to foreclose quickly. According to Stephen Meister, an attorney who represents Bauhouse in the foreclosure action, the Gamma debt expired last month.
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.”
Bauhouse’s Joseph Beninati has been trying to raise money for the project, which apparently now has a name: Sutton 58, but there are potential issues to overcome. As Crain’s points out, one is an excess of high-end residential units. Another is a proposal from the East River Fifties Alliance to impose a 260-foot height cap.