While most of the city’s “professional” developers like Silverstein, Vornado, RFR and Extell are paying property taxes on their stalled development sites, wannabe newcomers and those with shallow pockets have not only stopped construction but stopped paying city tax levies.
During the last few days we sampled about 40 of the city’s 129 stalled Manhattan construction sites and found more than half owe taxes — totaling over $10 million.
Some sites are on the city’s recently released 10-day tax lien sale list while others are not. The lien list covered 15,260 parcels owing $397,942,197 — some which has been paid off, but most are still due.
Take the First Avenue site that developer Steven Elghanayan and Alexico Development amassed starting in 2007.
By 2009, its lender at Bank of America had hired Massey Knakal to sell two notes totaling $30.6 million on the vacant 150,000 buildable square-foot site, located at 953-961 First Ave., between 52nd and 53rd streets.
The loan was recently transferred to New Valley, a development company headed by Howard Lorber that also has a 50 percent interest in Douglas Elliman. That office referred me to Harry Macklowe who didn’t return calls for comment.
While we were thrilled to see laser sharp Macklowe focused on another development, the site still owes $1,353,487 in property taxes.
The well-located former Drake Hotel site at 440 Park Ave. controlled by CIM Group, where Macklowe is still involved, however, has up-to-date taxes.
At 315 E. 46th St., another stalled site in Midtown, Alexander Gurewitch erected five of its 23 stories before it was shut down, taken over by the lender and sold for $44.7 million to the United Arab Emirates. But that was in November, 2009. Today, the UAE owes the city about $840,000 in overdue taxes. The site is in limbo. No calls were returned.
Similarly, after a lawsuit forced them to close on a reduced purchase price, the Government of Senegal bought the site at 227-235 E. 44th St. for $23.9 million. Today they owe the city $372,000.The US Agency for International Development (USAID) documents show the country obtained $4.1 billion in aid in 2008, $3.5 billion in 2009 and nothing at all in 2010. Another source said its development assistance was about $100 million. No one from the country could be reached for comment and the lawyer declined to talk.
According to the Finance Department, there has been no movement to pay on the properties owned by either the UAE or Senegal after they were both purchased 21 months ago.
Many of the Buildings Department’s stalled development site list owners no longer have working phone numbers or addresses and could not be reached.
It is no wonder neither the city nor their lenders can collect a dime. The amount of overdue property taxes is also a problem for the lenders and brokers who are selling the notes, and for the buyers who hope to move along construction, one such broker advised.
Developer Zeil Feldman recently bought the development site at 303-307 E. 51st St. and made a property tax payment of nearly $80,000 along with another of $46,400 for its corner lot at 964 Second Ave. But the site owes $2.4 million in previous emergency repairs and demolitions due to the deadly crane accident that took place under the former developer.
A spokeswoman for Feldman said by e-mail he was willing to discuss his plans — but he never called.
The D.A.B group’s stalled site at 139-141 Orchard St. owes the city a total of $96,092. The loan was sold earlier this month to Orchard Hotel, LLC controlled by Maverick Real Estate Partners.
“A receiver was appointed and certain things are being handled,” Maverick partner, David Aviram said, declining to discuss their plans for what is now a bare 16-story concrete superstructure.
Sources said the Israeli group, Darban Investments, has bought the $92 million loan at 950 Second Ave. where a partial stop work order exists on a proposed 27-story building. Thankfully, payments were just made to bring the back taxes up to date.
While on the stalled sites list, the old Toy Building at 1107 Broadway also owes $1.973 million. As we previ ously reported, its Leh man loan is being sold to Steve Witkoff for $190.8 mil lion through an Eastdil Secured bankruptcy auc tion. As the deal has not yet closed, Lehman will likely be responsible for real estate taxes but Witkoff did not return a call for comment.
We hope city officials push to get some of these zombie situations resolved.
Lois@BetweenTheBricks.com