A Williamsburg condominium may be saved from foreclosure.
This week, developers for Warehouse 11 and officials with Capital One Bank reached a tentative deal for the developers to purchase the building’s debt.
Final details of the agreement were not released by the time this article went to press, but sources noted that developers Isack Rosenberg and Yitzchok Schwartz had proposed offering $30 million to Capital One Bank to pay for the 120-unit Warehouse 11 (214 North 11th Street) earlier this year, which the bank had initially eschewed in hope of receiving a larger settlement.
On February 5, a bankruptcy court judge rejected an initial agreement between the developers and the bank that would have delayed the developers’ extended March 31 deadline to purchase the debt on the condo building at a steep discount. It now appears that the agreement has been reached and foreclosure proceedings will be staved off. Rosenberg and Schwartz defaulted on their $50 million mortgage last summer, which had set off alarms of concern among investors and residents in Northside Williamsburg.
Instead, the developers are proceeding with the sale of the remaining units at Warehouse 11 over the next few months, after contracting with Williamsburg-based AptsandLofts.com to sell some units at a 25 percent below the value of the original asking prices. David Maundrell, President of AptsandLofts.com, declined to comment on the court filing, but noted that the building is 50 percent sold. The bank, Capital One, according to court filings, had no objections.
Rosenberg did not return calls requesting comment, and his attorney, Leo Fox, declined to comment about the foreclosure proceedings.
Friends of Rosenberg, a member of a Hasidic Satmar sect in South Williamsburg,who serve on the same congregation board, explained that Rosenberg is an equity investor in the property and that the building’s debts would have little effect on other properties and businesses in his portfolio, including Certified Lumber Corporation and Rose Plaza, the 801-unit South Williamsburg waterfront project, which is undergoing the city’s land use review process this spring.
“It looks like a bad investment,” said Gary Schlesinger, Executive Board Chairman of UJCare, and a colleague of Rosenberg. “This is only a piece of his vast empire. Schwartz is the developer. Schwartz is everything there. He was not involved in the day-to-day of the project.”
Moishe Indig, another friend, noted how “everybody is going through a very difficult financial crisis,” and that Rosenberg’s investments have been hindered similar to other developers in Williamsburg.
“There has been lots of new construction, building apartments up to the sky. Now everybody got caught in the middle. Everybody is in hot water, everybody has problems,” said Indig. “(Rosenberg’s) trying to get out of it, settle and see what he can do. He’s not looking to make a profit. He’s trying to sell for cheaper and do whatever he can to get out of this.”
Indig did not speculate what would happen to the future of the building, explaining that “only G-d knows what is going to happen.”
Community Board 1 Land Use Chair Ward Dennis, who has seen several buildings apply for zoning changes and permits in Williamsburg since 2005, noted that several condominium buildings in the Northside have foreclosed or been close to foreclosure, and Warehouse 11’s situation is not unique.
“Hopefully it will be worked out so the building will be occupied,” said Dennis. “An occupied building is better than a vacant building.”