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Investor claims Midtown skyscraper project runs foreclosure risk …

A skinny skyscraper under construction on Billionaire’s Row in Midtown is at risk of foreclosure because of “egregious oversights,” including the failure to budget for construction cranes, a new lawsuit charges.

Real estate investor AmBase Corp. sued Wednesday in Manhattan Supreme Court, seeking to protect the $70 million it has poured into the planned 82-story luxury residential tower at 111 W. 57th St.

So far less than 20 stories of the building – touted as the world’s skinniest — have been built, surpassing the historic Steinway Tower at its base.

In June a lender, Spruce Capital, declared the sponsors of the project were in default of a $25 million loan amid budget overruns in excess of $50 million, the suit says.

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“Mismanagement has resulted in overruns … apparently attributable in part to egregious oversights like neglecting to budget for construction cranes needed to construct a Manhattan skyscraper,” the complaint reads.

AmBase won a temporary restraining order Wednesday blocking Spruce Capital from taking ownership of the development. AmBase also sued the project’s sponsors, Kevin Maloney and Michael Stern. Calls to Spruce, Maloney and Stern were not returned.


Real estate investor AmBase Corp. sued Wednesday in Manhattan Supreme Court, seeking to protect the $70 million it has poured into the planned 82-story luxury residential tower at 111 W. 57th St.

Ambase attorney Stephen Meister said he suspects the default is part of a maneuver to cut his client out of the project.

“There’s no fathomable reason, other than a nefarious one,” he said.

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A real estate attorney who asked to remain anonymous said it’s clear the project is in trouble, but predicted it would still be completed.

“If they didn’t budget enough money for cranes, then everyone on the project should be fired,” the lawyer joked.

The troubled development is on the same block as One57, a luxury skyscraper that in June saw two condos be scheduled for foreclosure auction.

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Article source: http://www.nydailynews.com/new-york/investor-claims-midtown-skyscraper-project-runs-foreclosure-risk-article-1.3359122

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