An equity investor in the supertall condo development at 111 West 57th Street claims the developers are facing a cash shortfall of up to $100 million and may need to borrow more money, according to a filing with the Securities and Exchange Commission.
The investor, Ambase Corporation, has a contentious relationship with the developers, Michael Stern’s JDS Development Group and Kevin Maloney’s Property Markets Group, and acknowledged it has no access to communications between the developers and its lenders.
… In addition, Apollo (the mezzanine lender) has indicated that due to projected budget increases, it believes the current loan has been “out of balance”; and thus 111 West 57th Partners or its subsidiaries would need additional funding in order to complete the project.”
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Ambase sued the developers last year, alleging that they tried to dilute its stake in project through unnecessary capital calls. The suit provided a rare glimpse into the ownership structure of a luxury residential project. In January JDS and PMG countersued, alleging that Ambase is withholding “consent to necessary project refinancing” unless they “agreed to pay defendants a sum of money to which defendants were not contractually entitled.”
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In early 2016 Maloney said the developers will delay sales, citing a weak market.