A year ago, when the pandemic brought New York City to a standstill, the Chen Foundation was looking for $ 82 million to complete its condo in the Garment District.
The Foundation – a family-run construction company that worked with renowned Taiwan-born painter Dr. Tsing-Fang Chen – said she paid $ 75,000 to allow Tribeca Realty Capital to conduct due diligence and secure a loan on their project at 355 West 35th Street.
The loan never came to fruition, and now the Foundation is suing Tribeca for its $ 8.7 million fee and damages.
In a lawsuit filed last week in the New York Supreme Court, the Chen Foundation alleged that the company had breached its contract, misrepresented its access to credit, and caused the foundation a “significant financial loss.”
The foundation began converting the 12-story office building on West 35th into condominium after purchasing the property for $ 50 million in 2016. The project, known as the Society House, consists of 66 residential units and one commercial unit to house the artist’s non-profit gallery, TF. Chen Cultural Center.
The condos should be sold for a total of $ 91 million, according to the project’s most recent offering plan.
In 2017, the developer secured $ 52 million in funding from Shanghai Commercial Bank. When the foundation was looking for new funding early last year, it hired Tribeca Realty Capital, which calls itself the New York partner of a $ 27.5 billion asset management company that writes bridge, mezzanine and equity investments.
The foundation claims it selected Tribeca Realty partner Stephen Drew after identifying the source of its capital as a South Korean company ready to fund loans “anytime”. A second partner at Tribeca, Ted Kim, the lender’s general counsel, also calmed the foundation, according to his lawsuit.
The term sheet filed between Chen and Tribeca in the court filings shows that Tribeca expected two of its investment partners to syndicate the $ 82 million loan. But 45 days later, the contract expired without closing the loan and the Chen Foundation began to ask for the deposit back.
Tribeca Realty Capital did not immediately respond to the request for comment. In correspondence filed with the court, Drew attributed the delay to the pandemic, but also noted that the term sheet gave Tribeca Realty “sold and absolute discretion” to complete the loan and perform due diligence.
“We have acted in good faith all along, and Covid-19 and the virtual shutdown of New York City contributed to the delay,” Drew wrote in an October email. “Our team is ready and willing to complete this loan as soon as the capital markets are reopened in NYC.”
The Chen Foundation has also been told that the process has been delayed due to difficulties entering the United States, according to attorney Sylvia Tsai, who represents the foundation in the lawsuit.
“Allegedly the headmasters came from South Korea,” said Tsai. “[They] allegedly couldn’t come [conduct] Due diligence. “
In November, Shanghai Commercial Bank refinanced the Chen Foundation’s condominium, adding $ 8.58 million to bring the financing package to a total of $ 60.58 million.