Courts roundup: $15.5M Brooklyn pre-foreclosure, $5.5M Manhattan pre-foreclosure, Domain rent suit

Valley National Bank files $15.5M pre-foreclosure suits: Lender Valley National Bank yesterday filed two pre-foreclosure suits totaling $15.5 million in original principal against borrower Ira Epstein, who owns the two Brooklyn properties, the 57-unit 4112 4th Avenue in Sunset Park, and the 32-unit 8200 Bay Parkway in Bensonhurst.
Court filings represent the position of one party and are not necessarily accurate or complete.
In the larger filing, Ira Epstein bought the building in 2012 for $8 million, and most recently refinanced it for $10 million from Valley National Bank, which filed this action alleging, “By written notice letter, dated July 15, 2022, and in accordance with the provisions of the Loan Documents, Plaintiff duly notified Borrower and Epstein that (a) the Loan was in default; (b) the amount immediately due and payable to the Lender was $10,648,631.53; (c) the Loan was accelerated and, effective immediately, the Default Interest Rate of 9.70% per annum was in effect; and (d) that all sums due thereunder were to be paid within ten (10) calendar days of the notice (the “Demand Letter”)… By reason of the foregoing, there is now justly due and owing to Plaintiff, upon the Mortgage, the outstanding balance of $10,997,352.69 as of January 5, 2023,”

The walkup building with 57 residential units in Sunset Park has 43,280 square feet of built space and 4,806 square feet of additional air rights for a total buildable of 48,068 square feet according to a PincusCo analysis of city data. The parcel has frontage of 120 feet and is 100 feet deep with a total lot size of 12,017 square feet. The zoning is R7A which allows for up to 4 times floor area ratio (FAR) for residential with inclusionary housing. The city-designated market value for the property in 2022 is $4.6 million. This property was sold for $8 million on July 24, 2012. The 43,280-square-foot property generated revenue of $1.1 million or $24 per square foot, according to the most recent income and expense figures. LINK

In the second, Ira Epstein bought the building in 2012 for $8 million, and most recently refinanced it for $10 million from Valley National Bank, which filed this action alleging “By written notice letter, dated July 15, 2022, and in accordance with the provisions of the Loan Documents, Plaintiff duly notified Borrower and Epstein that (a) the Loan was in default; (b) the amount immediately due and payable to the Lender was $10,648,631.53; (c) the Loan was accelerated and, effective immediately, the Default Interest Rate of 9.70% per annum was in effect; and (d) that all sums due thereunder were to be paid within ten (10) calendar days of the notice (the “Demand Letter”)… By reason of the foregoing, there is now justly due and owing to Plaintiff, upon the Mortgage, the outstanding balance of $10,997,352.69 as of January 5, 2023,”
The walkup building with 57 residential units in Sunset Park has 43,280 square feet of built space and 4,806 square feet of additional air rights for a total buildable of 48,068 square feet according to a PincusCo analysis of city data. The parcel has frontage of 120 feet and is 100 feet deep with a total lot size of 12,017 square feet. The zoning is R7A which allows for up to 4 times floor area ratio (FAR) for residential with inclusionary housing. The city-designated market value for the property in 2022 is $4.6 million. This property was sold for $8 million on July 24, 2012. The 43,280-square-foot property generated revenue of $1.1 million or $24 per square foot, according to the most recent income and expense figures. LINK

$4.5M Carnegie Hill medical condo pre-foreclosure, part of long family dispute: The special servicer for a $4.5 million loan secured by a 6,900-square-foot medical condominium unit at 1049 Fifth Avenue in Carnegie Hill, Manhattan, filed a pre-foreclosure action yesterday. The loan signatory, Jean-Francois Simon, has been accused of improper actions related to this professional condo by his brother Jean-Pascal Simon and by a State Supreme Court Justice. The unit is estimated to be worth at least $8.7 million. In a related case 162867/2014  the New York State Supreme Court Justice Andrew Borrok wrote, “For the avoidance of doubt, it is of no moment that the receiver has not yet determined whether and the extent to which the proceeds of the most recent $4.5 million refinancing obtained in violation of this court’s (Scarpulla, J.) order may have been embezzled by Mr. Jean-Francois Simon (i.e., the prior mortgage was $2.5 million on this net leased property). The court’s order (NYSCEF Doc. No. 47) prohibited refinancing without sixty days prior written notice to Jean-Pascal Simon. This was undeniably done surreptitiously and without consent and with the assistance of Mr. Mark Lebow, his attorney, who is the notary on the mortgage refinance documents and the notice party in the same (NYSCEF Doc. Nos. 886-888) who knew full well that such refinancing constituted a violation of this court’s order. ”

According to the 2014 suit by brother Jean-Pascal, “JJS owns the condominium property known as 1049 Fifth Avenue. New York, New York, 10028, Professional Unit 3, Block 1497 Lot 1003 (the “Premises). FAC is the tenant of the Premises and in turn subleases the Premises to FASC and/or its putative successor, FAAA, which operates a multi-specialty surgery center therein with an operating license issued by the Department of Health of the State of New York. LINK

Domain Companies alleges rent-striking tenants owe $500K: Domain Companies, which owns the 210-unit 1133 Manhattan Avenue, alleges dozens of tenants have withheld rent for a four-month period when gas was restricted due to a building construction flaw.
According to the complaint, “Some or all of the Tenant Association members (between 67-90 apartment unit tenants) have withheld all rents payable under their respective leases for the months of October, November, December 2022 and January 2023, totally approximately $500,000 (the “Rent Withholding”), although the Tenant Association has stated that its members will resume payment of rent prospectively effective in or about January 7, 2023.
“Despite best efforts of Plaintiffs and its plumbing contractor and diligent repair and restoration work, heating in the building became unavailable for 67 days during the Fall months (specifically between 9/26/22 and 12/2/22), 45 of which days reached temperature below 55 degrees when heating service was required by law.
“While hot water to the building was restored within 4 days, by 9/30/22, gas for cooking was unavailable to tenants for 103 days between 9/26/22 and 1/7/23 (collectively, the “Natural Gas Outage”), at which time full gas utility service was restored.
“All required New York City and other required inspections have been obtained and completed as expeditiously as possible and final New York City approvals are expected to be received within days was received on or about January 9, 2023.
“The repairs and renovations to the gas delivery plumbing was performed at a cost in excess of $1,000,000 over a three-month plus period utilizing the services of fifteen licensed plumbers on a 24/7 basis in order to promptly restore gas delivery service to the building and its tenants.” This action concerns the multi-family residential apartment property consisting of 210 residential apartment units (the “Apartment Units”) located at 1133 Manhattan Avenue, Brooklyn, New York 11222 constructed and occupied in or about 2014 and 2015 (the “1133 Building”).” LINK

Direct link to the property’s ACRIS page and link to DOB NOW portal.