Outdated assemblages by no means die, they merely fade away.
At a busy intersection in Borough Park, Samuel Pfeiffer and his spouse Dina Krausz noticed their fortune in a plot the place a White Citadel restaurant served its famously devoted followers, who cherished the fast-food chain’s sliders on Valentine’s Day particularly.
Pfeiffer and Krausz had established themselves within the working-class Brooklyn neighborhood with a modest condominium undertaking at 1044 forty second Avenue, with 4 items priced at a complete of $1.8 million. By the point the undertaking offered out within the late 2010s, the couple was in search of one thing bigger.
They didn’t should look far.
On the identical block, at Fort Hamilton Parkway and forty second Avenue, Pfeiffer, who additionally goes by Shabsi, amassed two extra properties together with the White Citadel and filed plans for an 18-story residential constructing. Renderings present an Artwork Deco design.
Right this moment, virtually a decade after Pfeiffer demolished the White Citadel, hardball lenders have taken again the assemblage, leaving business veterans to scratch their heads on the lengthy and winding undertaking, which by no means landed a development mortgage.
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“Often it’s fairly easy,” stated Greg Corbin, who guided one in every of Pfeiffer’s properties by chapter. “However this was extra a case of ‘the canine ate my homework.’”
Corbin described the scenario as “shady, however not in an unlawful method.”
In 2005, traders led by Abraham Wieder went into contract to purchase the White Citadel property, at 4202 Fort Hamilton Parkway. Twelve years later, they nonetheless had not closed, and acquisition prices had ballooned to $14 million from $6 million, sources advised The Actual Deal in 2017.
Wieder, who has claimed to have a portfolio of 5,000 residences, has been sued for greater than $40 million in unpaid mortgages. After a latest spree of multifamily acquisitions, not less than three of his properties have spiraled into decline, dragged down by insufficient maintenance and unpaid debt.
To shut the White Citadel deal, Pfeiffer, Wieder’s obvious accomplice, obtained $10 million from Eli Tabak’s Bluestone Group, a distressed-debt investor whose mortgage was meant to jumpstart an workplace undertaking on the location. A veteran participant, Bluestone not too long ago flipped a coveted portfolio on Manhattan’s west aspect to Extell Growth.
Pfeiffer’s subsequent transfer got here a yr later, shopping for the neighboring 4218 Fort Hamilton Parkway utilizing $8.3 million from Joseph Oved’s Ice Cap Group. The exhausting cash mortgage coated greater than 95 p.c of the sale, an exceptionally excessive determine. The lender advertises offering “aggressive leverage” to debtors.
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With Pfeiffer and Krausz answerable for all three websites, they merged unused flooring space, doubling the allowable measurement of a improvement on the nook of forty third Avenue and Fort Hamilton Parkway to 103,000 sq. toes, in line with Frank Chaney, a zoning lawyer at Rosenberg & Estis.
Plans for the 18-story residential undertaking had been authorised by town in 2019, however with out development financing, Pfeiffer defaulted on its mortgage from Bluestone. In 2020, as the primary Covid instances popped up within the metropolis, the location headed to auction. Final week, Bluestone lastly took possession of the property.
Pfeiffer and Wieder couldn’t be reached by their attorneys. Bluestone didn’t reply to a request for remark.
In separate chapter proceedings, Pfeiffer faulted Ice Cap for the eventual default at 4218 Fort Hamilton Parkway, alleging that the lender lowered its monetary dedication simply in the future earlier than Pfeiffer’s deadline to shut on the property.
Maguire Capital Group, which declined to remark, purchased the debt from Ice Cap in 2019, taking up the undertaking by chapter in August.
Regardless of Pfeiffer’s switch of improvement rights to what’s now Maguire’s property, chapter courts seem to have nipped within the bud any authorized dispute between it and Bluestone. The 2 events gave up authorized claims to the air rights switch, court docket paperwork present.
Bluestone and Maguire might now search to promote the parcels individually. In the event that they offered to separate consumers, that would snuff out the potential for a big constructing on the location.
Elsewhere in Borough Park, there are indicators of additional hassle for Wieder and Pfeiffer.
Pfeiffer signed for almost $12 million in loans secured by 5601 thirteenth Avenue, a vacant lot owned by Wieder the place the Division of Buildings has stopped the development of a seven-story, mixed-use constructing, citing excellent civil fines owed to town.