New York developer Joseph Moinian is suing Related Cos. and a group of lenders, accusing them of a “loan to own” scheme as he fights against a takeover of his newly renovated 3 Columbus Circle tower.
The suit, filed late yesterday in New York State Supreme Court, accuses Related and the lenders of interfering with his business dealings at the Midtown office building, also known as 1775 Broadway, thereby making it “un-leasable.”
Stephen Ross’ Related, which owns the nearby Time Warner Center, and a unit of Deutsche Bank AG bought debt on the 26-story tower and sued last month to foreclose on the building after Moinian missed payments.
The suit seeks $600 million in damages and stay on the foreclosure action. Moinian also wants to be able to pay off the mortgage and have it transferred.
In addition, he is asking that the defendants be barred from making “false and misleading” statements about the property.
Yesterday, Moinian and SL Green Realty Corp. announced the framework of an agreement to recapitalize the tower in a deal that was first reported in the Post last month.
The pact calls for Moinian to oversee the continued $100 million redevelopment and management of the 770,000-square-foot tower, while SL Green will undertake leasing. SL Green will have a 49 percent stake and has agreed to provide back-up financing.
But for the SL Green pact to succeed, Moinian needs an injunction against a foreclosure action filed by Related’s partner, German American Capital Corp., a division of Deutsche Bank.
The complaint was also filed against original lender Wachovia; loan trustee Bank of America; special servicer CW Capital Asset Management; and Related, which bought the mortgage and then reassigned it to GACC.
Moinian paid $130 million for the tower in 2000. He began renovating the tower, which carries a $250 million mortgage, shortly before the credit crisis hit. He stopped making payments in January.
Moinian’s suit claims that starting in January, he negotiated a complete restructuring of the mortgage and made over $22 million in “good faith” payments — signing the agreement in June.
According to the suit, the lenders then received an offer from Related for the loan and “changed course.” They refused to countersign the agreement, and demanded six-month demolition clauses with no tenant reimbursement for a 33,000 square-foot lease with HQ Global Workplaces and a 77,000-square-foot deal with talent agency, William Morris Agency, thereby killing the deals.
The lenders also demanded full payment in March but then refused to accept a payoff or reassign the $250 million mortgage without a $54 million pre-payment charge that was so “bogus” it was not even requested in the foreclosure action that was filed in September, right after Related bought the loan, the suit claims.
Related’s Ross has made no secret of his plans to take over the tower, demolish it and build an entirely new and larger tower with Nordstrom’s in the base topped by luxury condominiums overlooking the Museum of Arts & Design, Central Park and, of course, his Time Warner Center.
In a statement, Mark Walfish, counsel for Related Companies, said: “Our client believes that the lawsuit is totally without merit and is designed to attempt to excuse the borrower’s default in its mortgage obligations. They look forward to having their position vindicated in the courts.
“In the meantime, they hope that the plaintiff will fulfill its obligations in full on the mortgage which has been in default since January and pay the approximately $310 million owed on the loan.”
