Value of 45 Park Place debated in bankruptcy case

A rendering of 45 Park Place and Sharif El Gamal (SOMA, Getty)

The decade-long saga around 45 Park Place has taken on a new twist.

A feud between the developer of the Tribeca project, Sharif El-Gamal, lender Maybank and various contractors is now underway in bankruptcy court, where the building’s value of 50 luxury condo units is under review.

The El-Gamal appraiser puts the value of the still unfinished 43-story tower at $ 269 million, while the lender says it is only worth $ 88 million. Once completed, El-Gamal says the tower will be worth more than $ 400 million, compared to the more conservative $ 189 million for Maybank.

The beards are part of the latest chapter in the glitzy condo’s lengthy legal woes, which began in May when six companies joined forces in an attempt to force the project’s sponsor, a limited liability company run by El-Gamal, into bankruptcy. unintentional from Chapter 7.

The companies behind the proposed liquidation claim they owe more than $ 10 million in unpaid fees for work on the 43-story tower.

The case was filed in federal court in Delaware, where the LLC is incorporated, and was first reported by PincusCo. The plaintiff creditors include Ismael Leyva Architects and curtain wall contractor Permasteelisa North America.

Allegations of unpaid construction charges on the project are not new. General contractor Gilbane Residential Construction had a public confrontation with El-Gamal over a late payment of $ 10 million in 2019 and is now trying to recoup more than $ 15 million in his own stock.

Of the six companies that orchestrated the bankruptcy application, most had filed for mechanic’s liens on the property and in one case Domani Inspection Services sued the sponsor in the spring of 2019. What is new in this proceeding, this is its place – and its potential fallout.

A bankruptcy filing ends all other pending litigation, including a foreclosure action that El-Gamal’s lender, Malaysian bank Maybank, initiated in March of last year.

If the petition goes ahead, the El-Gamal company that runs 45 Park Place would have to liquidate all assets and the six creditors who initiated the case could pass the bank in line for reimbursement. This is a stark difference from the lender’s foreclosure process, in which most entrepreneurs would likely have their claims shattered.

With those issues, the bankruptcy filing created a case of strange bedfellows, with El-Gamal and Maybank aligned to advocate for the petition to be dismissed, though they pursue that goal in very different ways.

Maybank, who called the bankruptcy filing a “scorched earth litigation strategy to thwart and delay lenders’ efforts to foreclose,” argues El-Gamal has no money to pay a chapter trustee 7, not to mention completing the condo tower.

The bank attached a CBRE appraisal as supporting documentation that sets the market value of the project today at $ 87.9 million, compared to $ 189.2 million once construction is complete. The expert estimated that it would cost nearly $ 84 million over a year and a half to complete the tower.

In a petition filed last week, Maybank asked the court to dismiss the petition, or at least grant him permission to continue his foreclosure case.

El-Gamal’s camp is also asking the judge to dismiss the petition, saying the creditors are in bad faith and are using the court as a “collection device”. But the developer’s legal team argues that the project is in the dark and that liquidation proceedings could put it in jeopardy.

“Bankruptcy will not be economical or efficient, but will only cause further delay of certain problems and add substantial costs,” the developers’ lawyers wrote in their petition. They also asked the court to award them punitive damages and legal fees.

Citing a separate appraisal from JLL, El-Gamal said in an affidavit that the market value of the project today – with around 65% of construction completed – is $ 269 million. When completed, according to the valuation, it will be worth more than $ 400 million, compared to the nearly $ 140 million in secured and unsecured liabilities owed to about 85 potential creditors.

The tower offering plan projects its sale at $ 447.6 million. The asking price for the 50 units ranges between $ 2,102 and $ 7,535 per square foot, with 11 residences under contract, according to a July analysis by new development data firm Marketproof.

The parties are due to meet in court on August 18. El-Gamal declined to comment. The lawyer representing the creditors in the Chapter 7 action did not respond to requests for comment, nor did Maybank.

Comments are closed.