Ceruzzi Affiliates To Pay Lender $ 29 Million For Hayworth Project
Subsidiaries of Ceruzzi Properties accepted a $ 29 million judgment after failing to make payments on a $ 155 million construction loan related to the troubled Hayworth condominium project.
Executors of Louis Ceruzzi and BVS Acquisition Co. – an LLC linked to Ceruzzi Properties – will pay lender Children’s Investment Fund after allegedly defaulting as guarantors of the partially constructed Upper East Side tower loan, according to reports. court documents.
Children’s, a UK-based hedge fund, was initially only seeking $ 10 million from affiliates for failing to make interest payments between March and September 2020. But since Children’s filed its complaint in October, Ceruzzi made no additional payments, increasing the amount owed to $ 29 million.
The judgment marks the latest setback for the Hayworth 61-unit project. Ceruzzi and Kuafu Properties spent $ 118.6 million to assemble the site at East 86th and Lexington Avenue between 2013 and 2014. By the time the 21-story luxury condo started sales in 2019, the market had weakened significantly. .
After the pandemic, Ceruzzi struggled to secure rescue funding for the project. A JLL broker had also offered potential investors to buy out Ceruzzi’s position.
In May 2020, Ceruzzi chairman Art Hooper said the company was considering selling condos or renting units in the building. “Or is there a possibility that someone will come and invest in the building?” ” he said. “Or maybe sell all of the residential units to a wholesale buyer … Or a combination of all of the above.”
The Hayworth Project loan guarantors face challenges with lenders other than Children’s.
There are “a lot of lenders asking for payment and our client is trying to resolve them,” said Neil Leiberman, who represents the executors of Ceruzzi and BVS Acquisition, at a hearing in July, according to court documents.
The Hayworth isn’t the only Ceruzzi project to have seen setbacks since the death of company founder and chairman Louis Ceruzzi in 2017.
In March, the Industrial Bank of Korea filed a lawsuit for $ 40 million in damages after Ceruzzi allegedly defaulted on a $ 110 million loan supporting Centrale, a 72-story, 124-unit condo tower in Midtown. East. The state bank acted as the trustee of an investment fund.
Children’s, meanwhile, has made loans to some of New York’s biggest developers, including HFZ Capital. A subsidiary of Children’s is seeking to seize HFZ’s stake in its luxury condo development known as XI on the Far West Side.
An attorney for Ceruzzi did not immediately return a request for comment, and neither did an attorney for Children’s Investment Fund.