HFZ’s 11th Avenue mezz lender TCI seeks $160M from Ziel Feldman
By Adam Pincus
The lenders that control $755 million in mezzanine loans tied to the hotel, retail and condominium project at 76 Eleventh Avenue in Chelsea are seeking $159.995 million in loan payments from developer Ziel Feldman. The lenders are affiliates of the hedge fund TCI Fund Management.
The mezz lenders assert that they are owned the nearly $160 million because Feldman has allegedly defaulted on the loan by failing to make interest payments. The filing is not seeking to foreclose on the loan, instead it is seeking through a “summary judgment in lieu of complaint,” these guaranteed payments.
This is not the first lawsuit tied to this project, which some considered risky from the start with the purchase of land in 2015 for approximately $1,100 per square foot. Others suits include one from contractor Omnibuild in the summer of 2020 seeking $100 million and another from a brokerage firm seeking payment of rent for a sales center. Feldman has been besieged by lawsuits on other projects as well. (In another filing yesterday, an investor who allegedly provided $5 million to Feldman for a project in San Francisco sued to recover the money.)
Lawsuits filed in courts such as this one present assertions of fact from the point of view of the plaintiff and the information may or may not be accurate. Feldman has not filed response papers in this most recent case.
In a 22 page memorandum of law, the lenders lays out their claims that Feldman has not abided by the carry guarantee as provided in the mezzanine loans. The loans were initially provided in May 2017 by affiliates of Talos Capital, TCI and the Children’s Investment Fund, which are related entities. In December several of those investments were assigned to new entities, but the administrators are still affiliates of TCI.
To secure the loan, Feldman and HFZ agreed to guarantee interest payments.
“Plaintiff is forced to bring this action because Borrower repeatedly failed to make the monthly interest payments that were due from April 2020 through November 2020 under the Loan Agreement,” the filing says. The failure to make the payments, it claims, constitute an event of default.
The total due at the time of the suit filing was $159.995 million.