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The world’s skinniest proposed supertall, 111 West 57th Street, may be imperiled, the New York Post has learned. One of the investors on the project is suing the developers and the lender over alleged construction cost overruns.
The lawsuit, filed in the Manhattan Supreme Court, alleges that the project is already $50 million over budget when it hasn’t even reached 20-stories yet. Eventually the building is proposed to rise to 1,421 feet with 82 stories.
This investor, AmBase, has specifically blamed JDS’s Michael Stern, and Property Markets Group’s Kevin Maloney for the cost overruns, according to the Post. The increase in cost is allegedly due to the developers not accounting for the cost of construction cranes.
This seems to be the second lawsuit lobbed by AmBase against the developers. They sued JDS and Property Markets Group last year too, according to The Real Deal, alleging that the developers were trying “to dilute its stake” in the project. Previously TRD had also reported that AmBase paid $56 million towards a 59 percent stake in the project in 2015, but was unable to meet subsequent capital contributions.
In TRD’s article from earlier this month, the investor told the publication that the developers were facing up to a $100 million cash shortfall on the project. An anonymous source working on the project denied this claim to TRD.
The Post is now reporting that the developers also defaulted on a $25 million mezzanine loan from Spruce Capital Partners. Spruce allegedly looked to take over the property, but a judge blocked these foreclosure proceedings until a hearing that’s set to take place in the middle of August.
The legal counsel for JDS issued the following statement to Curbed:
"What Ambase's counsel stated happened today is not what happened. This is a baseless lawsuit which we will fully defend in court."
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