Investor Grant Shapolsky faces foreclosure on a Lower Manhattan development site with plans for a 10-story office building.
Lender Urban Standard filed a foreclosure suit on the property at 171 Bowery, between Broome and Delancey streets, alleging that an entity tied to Shapolsky’s Prime Manhattan Development defaulted on a $7 million loan.
Shapolsky’s firm took out the loan in 2019 with a maturity date of February 2020. After two extensions, Prime Manhattan Development entered into an August 2020 forbearance agreement under which Urban Standard pushed off exercising its rights until August of last year. That forbearance agreement was then extended to May of this year.
When May arrived, Prime had failed to come up with the money and Urban Standard put the loan into default with a hefty interest rate of 24 percent, according to the foreclosure suit.
Prime Development bought the property for $8.7 million in 2017, records show, filing plans for a 120-foot-tall, 21,000-square-foot project in January 2019. Demolition permits for the existing four-story multifamily building on the site were filed later that year, but the century-old structure has yet to face a wrecking ball.
In the foreclosure suit, Urban Standard also alleged that Prime failed to discharge a $142,000 mechanic lien filed by Kutnicki Bernstein Architects last year, along with a $97,000 lien filed by general contractor OTL Enterprises. Shapolsky said he is working to resolve the liens.
Urban Standard’s attorney did not return a request for comment, nor did a spokesperson for the lender.
Prime also has a $4 million subordinate mortgage on the property from Luxembourg-based Antares Bonds.
“We’ve raised the money and we are solving this over the next few weeks,” said Shapolsky, who guaranteed the Urban Standard loan, according to court documents.
“It’s challenging to raise money for smaller projects, but much easier for larger ones,” he added, mentioning that his firm is working to provide rescue capital to six other Manhattan property owners in the hospitality and office space.
A third-generation real estate developer, Shapolsky’s Prime Manhattan development has 72 properties and about 2 million square feet in its portfolio, he said.
The Shapolsky family has owned property on the Lower East Side since the early 20th century, at one point controlling at least 100 tenement buildings in Lower Manhattan and Harlem.