Mattone Group cuts debt following $81M pre-foreclosure at Jamaica Center retail complex in 2021

The Mattone Group has been sending additional funds to cover prior unpaid monthly payments missed during the Covid lockdowns, according to recent federal court records related to an $81 million pre-foreclosure filing at the Jamaica Center, a retail and office building at 159-02 Jamaica Avenue that includes the Jamaica Multiplex Cinemas.

The trustee for the bondholders of the loan, Series 2012-GCJ9, that had an original principal of $81 million, filed to foreclose on the debt in November 2021, which at the time had principal of $68 million, according to a New York Law Journal article last year. LINK

The Mattone Group controls the land as tenant under a ground lease signed in 2000 with landlord the City of New York.

Court filings are the positions of one party and are not necessarily accurate or complete.

The $81 million, 10-year loan was given in 2012 and matures in October 2022.

According to court records, “By letter dated October 27, 2020 (the “Notice of Acceleration”), Plaintiff, through its counsel, notified Borrower and Guarantors of, inter alia, Borrower’s failure to remit the Monthly Debt Service Payment Amount on the April 2020 monthly Payment Date and continuing thereafter (the “Payment Default”), accelerated all sums due and owing under the Loan Documents, and demanded that Borrower remit all sums due and owing under the Loan Documents…

“The Mortgaged Property, known to the community as the Jamaica Center, spans 215,806 square feet and is based at 159-02 Jamaica Avenue in Queens. Its major tenants include SUNY Queens, Multiplex Cinemas, Walgreens, Old Navy, and an underground parking garage. The Jamaica Center is located in an Opportunity Zone, which is an area that has been designated as a low to moderate income community. Borrower’s investment in the Jamaica Center has been incredibly beneficial for the surrounding community, by creating economic value, new jobs, and a safer city block and surrounding micro-neighborhood. For seven and a half years, between October 21, 2012, and May 2020, Borrower faithfully performed all of its obligations under the Loan Documents, including the timely payment of monthly mortgage amounts.

“During that period of time, Borrower never missed a payment and was never late on a payment. Everything changed in March 2020 when the COVID-19 pandemic hit New York City. Streets emptied overnight, retail activity ceased, and movie-goers traded the theatrical experience of movie theaters for streaming services… Since the initial default, Borrower has, in good faith, attempted to come current or otherwise reach a compromise with Lender. On October 28, 2020, despite the ongoing negotiations, Lender purportedly accelerated the loan.

“Since then, Borrower has continued its efforts to resolve the dispute, come current and settle the payment of six months of unpaid monthly payments… Lender’s demand in the “bring current” statement was astonishingly high. Despite the fact that Borrower owes only six (6) payments in arrears, which totaled $2,396,521.68, Lender has represented that Borrower owed Lender over $14 million.”

Direct link to Acris document. link