Legal entanglements that tied up a Financial District development site for years have been stripped away and its new owner wants to make up for lost time.
Richard Ohebshalom’s Pink Stone Capital has scored a total of $87 million in financing for two Washington Street properties, in part to settle a long-running dispute with his father Fred over the 11,255-square-foot site at 111 Washington Street.
Pink Stone closed on an $80 million loan from Carmel Partners and Fortress Investment Group and a $7 million loan from CBO Funding and Alwest Funding last Tuesday, the firm confirmed. The documents have yet to be publicly recorded.
The financing replaces $50 million in debt on the parcels, public records show. The company says the leftover proceeds went toward buying out Fred Ohebshalom, who runs Empire Management, a commercial developer and landlord with a portfolio of more than 4,000 apartments.
“These loan transactions relate to a mutually satisfactory settlement of disputes with our former partner,” said a spokesperson for Pink Stone in a statement. “We couldn’t be more excited about moving forward.”
A source familiar with the deal said the investment and development firm is now shopping for a buyer or a joint venture partner to begin developing the land.
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The Ohebshaloms bought the 111 Washington site out of foreclosure in 2011 for $57.5 million. In addition to air rights for four other properties, the deal included 105 Washington Street, a mid-block address separated from the vacant corner lot at 111 Washington by a five-story residential building with rent-regulated units. The World Trade Center is two blocks north.
The family’s plan was to develop a 54-story rental tower at 111 Washington, though it later appeared on the market initially seeking $260 million then $170 million.
In 2017, a disagreement between the father-son team spilled into the public eye when Richard Ohebshalom sued to stop his father from selling the Washington Street parcel for the “wholly inadequate” price of $148 million. (A week later, Ohebshalom sued his father again, alleging that a trust that held his stake in eight properties was depleted.)
A separate case was brought in 2014 by engineering firm Cosentini Associates over nonpayment of $300,000 in fees. The suit resulted in a notice of pendency being placed on 111 Washington in 2017.
Court records show that the legal cases involving the former father-son team and Cosentini were settled last week.
Pink Stone’s 105 Washington and 109 Washington, which is owned independently, are among the last remaining structures used by immigrants who arrived from the Middle East in the 1880s. Though local preservationists filed applications with the Landmark Preservation Commission, the buildings do not have protected status.
Write to Erin Hudson at ekh@therealdeal.com