Although the wind might be knocked out of the sails of a Brooklyn development site, a rainy day fund has been provided for the troubled development.
Santander Bank provided a $42 million construction loan to Slate Property Group for its 148-unit project in the Park Slope section of Brooklyn where a windstorm recently knocked off the top floor, according to New York City property records.
Terms of the financing for 535 Fourth Avenue, which closed on March 18 and hit public records this Monday, were not immediately available, and a spokeswoman for Santander declined to comment. Slate declined to comment via a spokeswoman.
The debt is a building loan leasehold mortgage, property records indicate, a specific type of construction loan for a borrower who is not the outright owner of a site but has a ground lease. Slate, Adam America Real Estate and AEW Capital Management took control of the site between 14th and 15th Streets two years ago through a 99-year ground lease with a local family, Commercial Observer reported at the time. The partnership paid $10 per buildable square foot—coming out to $1.8 million in annual rent, as The Real Deal reported.
Slate later that year announced plans for a 130,000-square-foot building, including 12,500 square feet of retail plus parking for up to 70 vehicles, CO reported in November 2014.
But construction of the Brooklyn property has been stunted over the last month thanks to the City of New York and Mother Nature. The New York City Department of Buildings shutdown the site on March 1 because the work being performed didn’t match the approved plans for the building, according to hyperlocal news website DNAinfo. The problem had to do with the direction of the structure’s concrete columns—they should have been facing upward but were not.
That was just the latest in about 20 violations the DOB hit the site with over the last two years. More than half of them were “class one” safety violations, DNAinfo reported, because they presented an immediate hazard to workers.
The revelations came after heavy wind gusts on Sunday, April 3 knocked out wood safety rails and molds for concrete on the ninth floor of the development. Slate Co-Founder David Schwartz told the website that no one was injured and all work had been stopped at 535 Fourth Avenue. The company, he added, was working with the appropriate city agencies in the wake of the wind storm to resume construction.
“Due to Sunday’s incredibly high winds, forms for the concrete being poured at our development 535 Fourth Avenue collapsed,” Mr. Schwartz said in a statement via a spokeswoman following the incident. “We immediately responded and have been incessantly working with New York City’s Department of Buildings, fire and police departments. There were no injuries, and to ensure proper safety, we have stopped all work at the development. We will continue to work with the city to bring 535 Fourth back to a safe construction site.”
This isn’t the sole reason longtime partners Slate and Adam America have been in headlines for issues with the city. The pair, in a partnership led by China Vanke, bought the Rivington House nursing home on the Lower East Side from Allure Group for $116 million and converted the property into a residential condominium. But the agreement required New York City Department of Citywide Administrative Services to lift the restrictions (which ensured the structure be used for non-profit work) on the deed.
The legality of Allure’s lobbying to get the deed restriction lifted has been called into question. New York City Comptroller Scott Stringer has subpoenaed city records, and New York State Attorney General Eric Schneiderman is also investigating the deal.