Legion buys bankrupt Casco Chelsea dev site for $87.4M

UPDATED, 8:40 a.m., April 18, 2024: Victor Sigoura’s Legion Investment Group, which recently purchased an assemblage of properties in Gramercy, paid $87.4 million for a stalled development site in Chelsea with the address 540 West 21st Street. Legion bought the site through the entity 550W21 Owner LLC.

Casco Development placed into bankruptcy last year in an effort to sell the property. At the time, the buyer was not identified, but subsequently the buyer was disclosed to be Legion Investment Group.

Legion Investment Group is working on several projects in Manhattan, including in Gramercy and in Carnegie Hill.

In a statement, Legion’s CEO Victor Sigoura said, “540 West 21st Street represents an exceptional opportunity to create a landmark project on one of the last remaining sites of its kind in New York’s most dynamic and trafficked neighborhood.”

The zoning allows for a maximum 171,959 square feet of commercial space or 140,605 square feet of residential. The development has a foundation that Legion can use. A Walker & Dunlop team led by Aaron Appel, Keith Kurland, Jonathan Schwartz, Adam Schwartz and Sean Bastian arranged the $55.76 million acquisition loan provided by Deutsche Bank, according to Legion.

According to the bankruptcy filing, the brokers were Hilco Real Estate and JLL.

Casco Development filed the chapter 11 petition in U.S. Bankruptcy Court in Delaware with a plan to sell the vacant development site at 540 West 21st Street in Chelsea, Manhattan where it planned a $539 million luxury residential condominium project.

Casco’s owner entity 540 West 21st Street Holdings LLC bought the property on January 30, 2014, for $50 million, and in July 2018 refinanced the debt with a $50 million loan from Bank Hapoalim. Noam Teltch, who signed on the previous mortgage is associated with Casco Development. Quinlan Development’s Marc Lazarus filed plans in 2017 for a 34-unit, 171,800 square foot building.

Casco submitted plans (CD180304) in 2018 to sell 34 residential condominium units for between $3.4 million and $58 million listing Uri Chaitchik and Noam Teltch as the principals. In April 2022, the anonymous entity Ray New York LLC bought the $50 million note secured by the project, as PincusCo reported at the time.

The project never obtained construction financing, and the owner effectuated the sale of the property through the structured bankruptcy. 23-11053-MFW

The surrounding

Within a 400-foot radius of 540 West 21st Street, PincusCo identified eight commercial real estate items of interests occurred over the past 24 months. Of those eight items, five were sales above $5 million totaling $109.5 million. The most recent of the five was David Zwirner Gallery which bought the 13,800-square-foot, one-unit mixed-use building (K2) on 527 West 19th Street for $11.7 million from Keith D. Jacobson on February 3, 2023. Of those eight items, three were loans above $5 million totaling $61 million. The most recent of the three was Guy Roberts in which borrowed $31 million from Citibank secured by the 34,600-square-foot, seven-unit mixed-use building (K2) on 521 West 21st Street and one other property on October 23, 2023.

Updated with comment from Sigoura, broker information and foundation information.

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