$101M bankruptcy filed at Tessler Developments’ Midtown South condo tower
172 Madison Avenue (Credit - Cyclomedia)
A bankruptcy restructuring specialist placed the entity that owns unsold residential and commercial condominium units at Tessler Developments’ mixed-use Midtown South tower at 172 Madison Avenue, at the corner of 33rd Street, into chapter 11 bankruptcy protection yesterday. The petition notes assets of $100.6 million and liabilities of $66.5 million.
Case 24-22500-pb LINK
This bankruptcy was filed the day of a scheduled UCC auction, in which note holder Arc Pe sought to foreclose on $62 million in debt it holds secured by 10 unsold condominium units and two commercial condo units in the building. The Real Deal reported in April on the UCC auction, noting the $62 million was composed of $44 million in principal and $18 million in interest.
Yitzchak Tessler’s Tessler Developments built the condo high-rise with 72 residential units and two commercial units.
The bankruptcy filing reveals the investors in the project, with Tessler owning 10 percent through the entity Madison YT, LLC; Natalia Pirogova owning 40 percent through the entity 172 Madison NP Member, LLC; a private fund managed by New Legacy Group called Arch 33rd Street, LLC with 15 percent, recently valued at $5.7 million ; the entity Livostin LLC with 10 percent; and Alex Fleyshmakher’s Samigor Development Group Corp. with 25 percent (the company Highscore Capital won a $9.5 million judgment against Fleyshmakher, through the case 654004/2020).
Alex Fleyshmakher pleaded guilty in January 2021 to participating in a scheme that paid millions of dollars kickbacks and bribes to health care professionals, according to a news release from the U.S. Department of Justice.
In addition to cases such as Highscore Capital’s, the property is directly the subject of two state court cases according to the bankruptcy filing, one in the Appellate Division, 1st Department, PJSC National Bank Trust v. Natalia Pirogova et al 2022-04001; and the other case is Natalia Pirogova v. Madison YT, LLC et al 652764/2020.
David Goldwasser of FIA Capital Partners, a bankruptcy specialist, filed the petition as the company’s chief restructuring officer. Yitzchak Tessler is making the payments to Goldwasser, the filing says.
The block
On this tax block, PincusCo has identified the owners of 10 of the 22 commercial properties representing 1,161,958 square feet of the 1,949,099 square feet. The largest owner is APF Properties, followed by Feil Organization and then GFP Real Estate. On the tax block, there was one new building construction project filed totaling 67,003 square feet. It is a 82-unit, 67,003 square-foot residential (R-2) building submitted by Pi Capital Partners and filed by James Pi with plans filed July 26, 2019 and it has not been permitted yet.
The owner
The owners according to the Department of Housing Preservation and Development includes Daniel Bekteshi, head officer and Larry Paparniku, site manager. The business entity is 172 Madison Avenue Condominium.
The surrounding
Within a 400-foot radius of 172 Madison Avenue, PincusCo identified three commercial real estate items of interests occurred over the past 24 months. Of those three items, three were loans above $5 million totaling $33.2 million. The most recent of the three was GFP Real Estate in which borrowed $16 million from Apple Bank for Savings secured by the 113,182-square-foot, nine-unit rental (C7) on 175 Madison Avenue and one other property on March 10, 2023.
Direct link to the property’s ACRIS page and link to DOB NOW portal.