Abraham Leifer is in a state of arrested development.
Merchants Bank filed a lawsuit against the developer on Wednesday, seeking foreclosure on a nine-story apartment conversion project following a string of forbearances at 19 West 55th Street. Meanwhile, Leifer is looking to cut his losses on the unfinished project.
Merchants alleged in the lawsuit that Leifer’s Aview Equities failed to repay the balance of a $36.7 million refinance loan, in addition to other defaults which include failing to maintain a cash balance of more than $9 million.
The bank took over lending on the project from Castellan Capital in 2020, which included a $3.7 million gap loan, public financing records show.
Plans for the 34,000-square-foot building, which Leifer bought from Salim Assa in 2018 for $50 million, included transforming the ground floor into retail, and adding several new floors of residential space to the top of the building, boosting its area by 14,800 square feet.
The vertical extension was called off, however, and several months ago, Leifer tapped Serhant broker Bernadette Brennan to unload the building for $42 million. Marketing material describes the building as “fully gutted and completely vacant with the exception of three rent-stabilized units.”
Its tenants recently filed complaints over the building’s conditions, including broken elevators and a malfunctioning boiler, according to Department of Buildings records. Brennan said that “financial reasons” had motivated Leifer to list the building.
Interest accruing on the defaulted loan is pegged at $24,000 per day, or 24 percent annually, according to the lawsuit filed by Merchants — a steeper APR than a typical consumer credit card.
Leifer has recently run into financial problems elsewhere, including in Downtown Brooklyn where the developer allegedly defaulted on a $29.7 million mortgage for a 100-key hotel project. He did not immediately return a request for comment.