The cost of building the world’s skinniest skyscraper has ballooned so enormously that the 111 W. 57th St. project is facing imminent foreclosure while it’s less than one-quarter complete, The New York Post reports.
The 82-story skyscraper has risen fewer than 20 stories and is $50 million over budget — “apparently attributable in part to egregious oversights like neglecting to budget for construction cranes,” according a major investor’s recent lawsuit.
Real estate investment corporation AmBase is suing the project sponsors Kevin Maloney and Michael Stern and lender Spruce Capital Partners to save its equity in the Steinway Tower overlooking Central Park.
“Over the past four years (AmBase) has invested over $70 million in the property. In two days, their investment may be wiped out,” the Manhattan Supreme Court suit says.
In the lawsuit, AmBase blames the costs overruns on Maloney and Stern.
“Apparently they omitted some very significant items in their budget including cranes, which are very expensive in New York and can run into the millions of dollars,” the Post quoted AmBase’s attorney Stephen Meister as saying.
Court documents say the construction budget was $855 million in June 2015. However, the owners – Maloney, Stern and AmBase – allegedly defaulted on a $25 million mezzanine loan payment to Spruce Capital Partners on June 30.
In late July, a judge blocked Spruce from taking ownership of the project in a strict foreclosure procedure pending a mid-August hearing on the dispute.
Spruce could still put 111 W. 57th St. up for a foreclosure auction, which would potentially allow AmBase to recoup some of its investment, Meister said.
A lawyer for Stern called the suit “baseless,” the newspaper reported.
In 2015, The New York Daily News reported that workers had filed suit alleging a “pattern and practice” of wage cheating by Parkside Construction, a contractor at the site where, if the project is completed, top apartments would go on the market for $100 million.