Hot damn! The Real Deal is reporting that Deutsche Bank is suing Macklowe Properties "to foreclose on $482 million in principal loaned to develop the Drake Hotel site at Park Avenue and 56th Street, according to a complaint filed [on Aug. 28] in New York State Supreme Court."
According to the report:
"The suit seeks to regain control not only of the 24,000-square-foot development site at the corner of Park Avenue and 56th Street, but also six properties that were drawn into the development loan."
Macklowe Properties has reportedly been planning to erect a 70-story residential tower at the site. But talk of the Macklowe plans have been overshadowed by the firm’s well-publicized wrangling with Deutsche Bank over other problematic loans. Indeed, earlier this year, Deutsche Bank took control of Macklowe’s seven-tower, $7 billion Equity Office Portfolio and has since sold off five of the midtown trophies.
Once the dust settled on that Macklowe drama, the Drake Hotel plans began to reemerge. Indeed, as The Observer reported in July, Macklowe bought out the remaining 10 years of Swiss watchmaker Audemars Piguet’s lease at 40 East 57th Street, in order, presumably to tear down the building in preparation for development, or to make the parcel more attractive to a buyer.
Now, the Macklowe plans are complicated by a lawsuit about a two-year-old loan. According to The Real Deal:
"…The initial $543 million development loan to Macklowe was made in March 2006, and secured by the Drake site, 50 East 57th Street and 44 East 57th Street. The loan was spread through three agreements in 2006 and 2007 to cover air rights to 42, 44 and 48 East 57th Street.
"The lender seeks to foreclose on Macklowe’s buildings at 38, 40, 44, and 50 East 57th Street. The suit asks for foreclosure on 42 and 46 East 57th Street, even though he does not control the properties, because they were in contract or being negotiated, the filing said.
"The loan was restructured in October 2007 with a maximum principal amount of $559.6 million, due in full on November 30, 2007. That was not repaid, the suit alleges, leading to the foreclosure filing."