July 27th - July 31st, 2009

A Developer in trouble: Moinian’s buildings in Lower Manhattan are on the brink

Joseph Moinian expects to default on loans this fall on two of his buildings- 180 Maiden Lane and 17 Battery Place North. According to Crain’s New York Business, Moinian may also default on 1775 Broadway and 95 Wall Street. The report says Moinian will miss a $53 million loan payment at 17 Battery Park North as well as a $292 million loan at 180 Maiden Lane.1775 Broadway is nearing the end of a $60 million renovation, but approximately two-thirds of the building is empty.  Moinian recently missed a $230 payment on 95 Wall Street; that building is almost fully leased. There are also rumblings that Moinian is having problems selling units at the W Hotel at 123 Washington Street; the building is scheduled to be completed in a few weeks.

The Port Authority ordered to pay for destruction of WTC substation

July 28 – A federal judge ruled the Port Authority has to pay Con Edison and its insurers $17.5 million to pay for a substation at the WTC site which was destroyed on 9/11. The PA has already paid $20 million and Con Ed was seeking $17.5 million more to over the replacement cost of the substation. A report in Metro says the judge rejected the PA’s claim that it shouldn’t have to pay the additional money until it receives payment from its own insurers.

Lower Manhattan executive named to Federal Reserve board

July 28 – Kathryn Wylde, President of the Partnership for New York City, has been appointed to the board of the Federal Reserve Bank of New York. According to The New York Times, Wylde will fill the seat vacated by Stephen Friedman and her term expires December 31, 2010.

Check-cashing scheme linked to the decontamination of the Deutsche Bank building

July 29 – A multi-million dollar check-cashing scheme has been uncovered by the Manhattan District Attorney, according to several published reports. DA Robert Morgenthau announced the indictments of two men, Riad Khalil of Brooklyn and Neil Goldstein of Marlboro, New Jersey; they are accused of falsifying business records and failing to file currency transaction reports. The DA’s investigation into the 2007 fatal fire at the building revealed that the John Galt Corporation was one of several hundred construction related companies involved in an unlawful check-cashing operation. Morgenthau adds the men created fake logs, failed to file required reports to state and federal agencies and charged check recipients up to three times the normal processing fees.

45 John Street facing financial issues

July 29 – German bank, Bayerische Landesbank, sued developer Manhattan Capital for $51.7 million, saying the developer defaulted on the project. 45 John Street is a luxury condominium conversion; the developer has missed payments on the building since February according to The Real Deal. The first sold unit was supposed to have gone to closing this week; the buyer will get their money back.

Concrete testing company is indicted

July 30- Stallone Testing Laboratories, a Westchester based company, and its Director William Bayer are accused of falsifying test reports on the strength of concrete at the World Trade Center Transit Hub, the Second Avenue subway, the Port Authority Bus Terminal and several nursing homes, schools, highways and bridges. Several published reports say the indictment is part of a continuing investigation by the Manhattan DA into concrete testing fraud; the first indictment was announced in October against Testwell Laboratories, whose projects included the new Yankee Stadium.

Obama administration expresses concerns over the PATH hub at WTC

July 30 – The Federal Transit Administration (FTA) told Real Estate Weekly, if the PATH station is delayed or redesigned, the cost of the project could jump. FTA Administrator Peter Rogoff said, “The project, as currently designed, is dependent on taking advantage of the structural walls of Towers 2 and 3. If the Towers don’t get built, then we need to go back and direct the PA to redesign the project. That would add to the cost and time schedule.” The FTA has $2.2 billion committed to the PATH station.  There are rumors that the PA is already drafting a plan which would alter the station design in order to sever its inter-connectedness with the two towers and complete the work without Larry Silverstein’s cooperation.