The week in New York City was all about real estate issues: who was in it before, who is in it today and how to avoid it in the future.
Problems arose for Eli Karp this week. Madison Realty Capital acquired its Flatbush property at 1580 Nostrand Avenue with a $70 million credit offer, where Karp once planned a sprawling two-building development called Hello Nostrand on the site.
Karp’s Hello Living purchased the site for $13 million in 2014 and touted plans to build a luxury apartment complex. However, as soon as construction started, he ran into trouble with lenders.
He put the property into bankruptcy in 2021, a day before senior lender Madison Realty Capital could launch a UCC foreclosure process. Madison sold a $6 million mezzanine loan and a $73 million senior loan on the property to another firm, Arch Companies, which sued Karp to initiate another foreclosure on the property.
He has completed only one of the buildings, a 93-unit rental property that was auctioned off next to the vacant lot in June. The once-rising star also lost 2417 Albemarle Road to his lender in a credit bid via auction.
Rescue party
Demolition company Alba Services was confronted with problems from the past.
The non-union subcontractor agreed to pay $1.5 million to settle claims that it ignored New York workers’ compensation laws, retaliated against injured workers and failed to report sexual harassment.
Alba is said to have failed to report hundreds of workplace accidents between 2016 and 2024, allowing the company to reduce its insurance costs. The company also threatened employees who attempted to file workers’ compensation claims.
The settlement was announced by the New York Attorney General’s office, but the ball started rolling when the workers’ union Local 79 launched a public campaign against the company in 2022, accusing it of offering rewards for information about employees who filed “false” workers’ compensation claims as a means of intimidation.
As part of the settlement, the company will be supervised by the attorney general’s office for at least three years and must submit biannual reports demonstrating compliance with workers’ compensation and human rights laws.
Concerns about lawsuits are nothing new for Alba. In 2023, it was one of 26 companies indicted in an extensive construction kickback scheme; According to the indictment, Alba received $2.8 million in inflated contracts and change orders at 250 Fifth Avenue and 189 Bowery.
The wolf’s den
Trouble followed Jordan Belfort – the inspiration of Martin Scorsese’s Oscar-winning ‘Wolf of Wall Street’. As he looks to take a new turn as a motivational speaker, anything related to the disgraced former stockbroker and convicted felon will continue to make headlines.
His former Long Island mansion at 5 Pin Oak Court in Glen Head found a buyer at a price of $6.9 million. lived in the 8,700-square-foot home with his wife, Nadine Macaluso, during the height of his career in the 1990s.
The FBI seized Belfort’s home in 2001, two years after his conviction for securities fraud and prior to a two-year stint in federal prison. So much for ‘not f*king making’, in the words of Leonardo DiCaprio, who played Belfort in the film.
Belfort turned his life around and moved west, buying an oceanfront home in Hermosa Beach, California, but has since apparently moved to Miami during the pandemic.
Reboot
Speaking of pivots, Richard Coles and Gary Tischler’s Vanbarton Group are becoming masters of office-to-residential transformation. This week, the company secured a $280 million loan from Invesco to refinance a 455-unit building at 980 Sixth Avenue.
The loan replaces a $273 million loan from Blackstone’s mortgage trust. Vanbarton began looking for permanent financing after converting the former three floors of WeWork into 77 market-rate apartments.
The company is one of the most active office-to-residential converters in the city, with a pipeline of more than 2,000 units.
Your move, Nathan Berman.
Read more
Eli Karp’s troubled Flatbush development is returning to the lender
Demolition company agrees to pay $1.5 million to settle claims it concealed workplace injuries and ignored sexual harassment reports
‘Wolf of Wall Street’ mansion on Long Island is selling for $7 million
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