Josh Zegan’s Madison Realty Capital had some major problems building a luxury condo development on a vacant lot on Fifth Avenue in Greenwich Village.
The 16 Fifth Avenue project stalled after the 14-unit building at 10 Fifth Avenue began to show cracks, forcing tenants to relocate, According to the New York Post.
Madison Properties The company bought the two parcels of land on which the project is being developed — a 19-story building with 14 apartment units — for $27.5 million in 2015, the outlet said.
The firm demolished two townhouses on a site in the Greenwich Village Historic District that contained 20 units, including about 10 rent-regulated units.
Often that’s the hardest part, as demos would likely require both buildings to be emptied, which would mean buying out the tenants, The Washington Post quoted Andrew Berman as saying.
But after Madison Properties managed that feat, it ran into more significant problems as it began digging for a new vacant lot in December 2022, with tenants at 10 Fifth Avenue reporting cracks in their units.
“The corners are coming apart and you can feel a draft,” one tenant said, according to The Washington Post.
The “Washington Post” stated that the external situation further deteriorated. On February 18, large parts of the building began to collapse, and the tenants were finally forced to move within two hours.
Andrew Rudansky, a spokesman for the Department of Buildings, told The Washington Post that about 3 inches of separation had developed on the fifth floor “between Building 10 on the fifth floor and Building 12 on the fifth floor.”
Temporary supports have been installed to stabilize the 10 Fifth, the outlet said.
“The way they treated us was extremely harsh, callous and irresponsible,” one tenant told The Washington Post. “We warned them in December and they didn’t brace until after we left.”
Madison Properties paid for the hotel for the first 10 days after the tenant moved out. Tenants at 10 Fifth, however, sought alternative housing as they awaited the fate of the building.
“We are working closely with the DOB and LPC to ensure the safety of the construction site, and to that end we have received permission to restart certain restoration work. We look forward to further finding effective solutions to secure the site and complete Fifth Avenue Construction on 16th,” Madison Properties said in a statement to The Washington Post.
Madison Realty, run by Zegen, Brian Shatz, and Adam Tantleff; known for its aggressive approach. The firm has built a solid reputation as a special situation lender, financing challenging transactions and providing rescue financing to some of New York’s most scrappy builders.
— Ted Glazer