Toby Moskovits’ Bushwick Hotel Development Faces Foreclosure
By Nicholas Rizzi June 3, 2021 10:28 am
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Toby Moskovits’ Heritage Equity Partners faces foreclosure on another Brooklyn site: this time, its proposed 144-room hotel in Bushwick.
Lender Fortress Investment Group sued the LLC tied to the 232 Seigel Street development, which filed for bankruptcy in July, to foreclosure on the property after the LLC defaulted on its $5.25 million loan, PincusCo Media first reported.
Representatives for Fortress did not immediately respond to a request for comment. Moskovits declined to comment.
Fortress claims that Moskovits and 232 Seigel Acquisition LLC defaulted on the construction loan in 2019 after they failed to complete the construction of the 10-story, 97,245-square-foot hotel on the vacant lot between Bushwick Avenue and White Street, court records show.
As part of the dismissal of the bankruptcy case, a judge ruled that Heritage Equity would pay off the $3 million mezzanine loan and allow Fortress to move forward with the foreclosure procedure, claiming Heritage Equity now owes $8.2 million for the default, including late charges and interest, according to court documents.
Heritage Equity, led by Moskovits and business partner Michael Lichtenstein, bought the lot at 232 Seigel Street with 15 other nearby plots of land for $28.5 million in 2015, The Real Deal reported. It filed plans later that year to build a hotel, designed by Morali Architects, with a gym and a restaurant.
In November 2019, Moskovits sued her original lender, Bridge City Capital, to stop default and acceleration notices on the $5.25 million loan. Fortress bought the debt in January 2020 and Moskovits refiled her case, accusing Fortress of “predatory tactics” and only buying the loans to try and take over the project, TRD reported.
Moskovits later withdrew the suit in July, a source previously told Commercial Observer.
The Bushwick hotel development isn’t the only troubled asset for Heritage Equity in recent months. Moskovits is facing a slew of lawsuits and foreclosures for different projects around Brooklyn, including the office development at 215 Moore Street, according to TRD.
And, in February, Heritage Equity filed for bankruptcy on its flagship development, the 147-room The Williamsburg Hotel, nearly a year after it defaulted on its $68 million loan.
