Sag Harbor condo project on auction block
A troubled Sag Harbor condominium development is headed for the auction block, with bids due Friday.
The minimum bid for the incomplete, 15-unit complex at 21 W. Water St. is $27.1 million, according to the broker handling the bankruptcy sale, Matthew Bordwin, co-president of Melville-based GA Keen Realty Advisors.
Bordwin declined to say Thursday whether he had received any bids, but he said about 40 potential buyers have taken a close look at the complex. If qualified bidders are found, the auction will take place Aug. 20, Bordwin said.
"The overwhelming response has been that people love it," Bordwin said. "It just comes down to a question of price. We'll find out tomorrow whether the market thinks the price is reasonable or not."
The lender, Amalgamated Bank, is "completely comfortable" taking control of the development if it does not attract a buyer, he said.
One local broker said he does not expect the sale to draw much interest. "It doesn't strike me that $27 million is a realistic asking price," said Simon Harrison, a broker in Sag Harbor for 25 years.
The builder, East End Development, received funding in 2007 and ran aground when the housing market crashed, according to court filings in the bankruptcy case.
Manhattan-based Amalgamated loaned about $28 million to the builder in March 2007, according to an affidavit by Emil Talel, an executive with ties to the builder. The debt had mounted to nearly $31.2 million by May 2012, Talel testified in October 2012, when East End filed for Chapter 11 bankruptcy protection.
The waterfront three-story building, which sits on nearly an acre, was originally intended to include 19 units, as well as a penthouse-level saltwater pool, Talel testified. It is nearly 90 percent complete, according to Talel's affidavit.
The project stalled due to "the economic downturn and various interruptions and unexpected delays and issues concerning the construction," Talel testified. As a result, the builder fell behind on payments to vendors, according to Talel's affidavit.
Amalgamated sued to foreclose in August 2011, but later agreed to provide more funding to continue work, Talel testified.
Attorneys for the builder and Amalgamated did not return calls for comment yesterday.