3 Sutton Place/Google Maps
Bauhouse Group is apparently facing financial trouble amidst community opposition for its latest development. Gamma Real Estate, the lender behind Bauhouse’s latest project located at 3 Sutton Place, is initiating a foreclosure on the planned development, Crain’s New York Business reports.
Loans on Sutton 58, the massive condo development that sent neighbors and community members into a frenzy since they laid eyes on brochures of Joseph Beninati’s 80-story skyscrapers, expired last month. According to Gamma’s website, it has advanced $63 million for first mortgage and mezzanine to Bauhouse Group. All-encompassing, the real estate investment firm is looking to get back the $128.8 million it lent to the developer, a debt figure derived from city property records.
Bauhouse and attorney Stephen Meister believe the foreclosure is impulsive.
“The lender’s flawed and incomplete legal steps to rush the auction are commercially unreasonable and will not withstand judicial scrutiny,” the developer released in a statement.
Bauhouse managing member Joseph Beninati acquired three neighboring walk-ups near Sutton Place and 1st Avenue for $32 million last January. He also acquired development rights from a neighboring property on E. 58th Street, bringing the total purchase to about $40 million.
Foreclosure isn’t the first obstacle to cross Beninati’s lap regarding his high-rise concept. When he first spoke with the community, reports state he shared more modest height estimates than the Norman-Foster designed tower rendering released to the public last April – somewhere around 13 to 30 stories high, which would better fit with Sutton Place’s existing charm and aesthetic.
In late January, residents filed a proposal to rezone Sutton Place so high-rises remain “contextual” with the neighborhood, according to Bloomberg. Local residents and advocacy group East River Fifties Alliance hastily met with the Department of City Planning to place height limits on new buildings before Sutton 58 could begin construction. The plan, designed to replace R10 zoning designations with no height restrictions, would limit building heights to 260 feet, or 25 stories high. It would also encourage community spaces be dedicated to medical offices and day cares. And, on the cusp of the NYC City Council hearings for Mayor Bill de Blasio’s rezoning for affordable housing, the East River Fifties Alliance also submitted a proposal that 25 percent of residential units in new developments be dedicated to affordable housing.
Now, with a possible foreclosure looming, concerned neighbors might rest easier. However, Bauhouse added that there are “multiple sources of capital competing for the opportunity to finance the next round of the Sutton Place development.”
