Isaac Hager’s Williamsburg hotel project placed into bankruptcy to halt UCC auction
By Adam Pincus
Brooklyn developer Yitzchok “Isaac” Hager’s Williamsburg hotel project at 159 Broadway was placed into bankruptcy yesterday, with assets and liabilities in the range of $10 million to $50 million each, according to the petitions. The ownership entities made the filings in Manhattan, in the U.S. Bankruptcy Court for the Southern District of New York.
The petitions were made to halt a mezzanine foreclosure auction on a $3.5 million mezzanine loan the investment firm Bluestone Group lent to the developer in 2019, according to a source familiar with the case. The auction was set for 2 p.m. yesterday.
Hager filed plans in 2018 to build a 256-key hotel with a total building size of 130,000 square feet and 92,733 square feet of zoning space. The new building plans were permitted in 2020. Madison Realty Capital provided $24 million in a land and construction loan in 2019, while the Bluestone Group provided the $3.5 million mezzanine lone. Hager was the signatory for the loans.
The UCC foreclosure auction was being marketing by Greg Corbin and Aaron Jungreis of Rosewood Realty Group, the team that was also marketing the mezzanine on 85 Flatbush Avenue Extension, another Hager-affiliated Brooklyn property that was put in bankruptcy recently.
The 159 Broadway loan was maturing and needed to be refinanced, however the market for hotel development loans has been severely impacted by the Covid-19 pandemic, a source familiar with the filing said.
“There have been negotiations with the lenders to resolve the matter and are still ongoing,” the source said. PincusCo reached out to Rosewood and Bluestone for comment. Rosewood declined to comment and Bluestone did not immediately respond.
This is the second Hager project with a Bluestone mezzanine loan placed into bankruptcy in the last several days. On Friday, the entities that control 85 Flatbush Avenue Extension filed for bankruptcy, also in the Southern District.
The two entities that filed yesterday on 159 Broadway were WB Bridge Hotel LLC and 159 Broadway Member LLC. David Goldwasser of FIA Capital Partners, a chief restructuring officer, was the signatory for the entities that petitioned.