Developer: Newark Stadium Site Project Saved from Foreclosure

Jack Klugmann’s sprawling portfolio in New Jersey has faced numerous foreclosure threats from Madison Realty Capital. Yet he’s managed to hold on to it.

Klugmann, whose firm Accurate Builders and Developers is based in Lakewood, New Jersey, claims he has now resolved the situation by restructuring or selling some of his properties to Madison Realty.

One property he kept was the site of the former Newark Bears stadium, where for years he has been pursuing a massive project. The developer secured a $395 million loan in 2021 from Madison and planned to build 4,200 apartments over several phases. The loan also went to refinance additional rental properties in Klugmann’s portfolio in Bayonne, Raritan and Linden.

“We’re going to be building a mini-city over here,” Klugmann said at the time about the Newark project. “We’re trying to create a destination.”

But Madison Realty initiated a U.C.C. foreclosure on the equity interests in the Newark site. An auction by Matthew Mannion of Mannion Auctions was set for Tuesday but did not occur, perhaps because a deal was indeed reached. Madison Realty Capital did not return a request to comment.

Klugmann said he restructured a loan to keep the Newark properties and reworked loans on properties in Clifton and Cedar Grove that also faced foreclosure by Madison.

Now, Klugmann said, he is no longer facing any foreclosure threats. He declined to provide further details about the restructuring or asset sales.

“We have a good relationship,” Klugmann said about Madison Realty in a brief interview.

A savvy, aggressive alternative lender willing to finance risky projects, Madison initiated at least four U.C.C. foreclosures on the equity stakes in Accurate’s portfolio, including on a new rental property in Bayonne. A U.C.C. is a non-judicial foreclosure that sidesteps the lengthy court process.

In an interview last year with RE-NJ, Klugmann said the Newark project will take at least 10 years. His firm has secured approval for the first phase.

“This is the best piece in Newark, by far. I don’t care what anybody tells me,” Klugmann told the publication.

Madison Realty, led by Josh Zegen and Brian Shatz, is among the busiest non-bank lenders in New York City. The firm recently raised more than $2 billion for its latest debt fund.

Madison Realty writes big checks and is not shy about initiating foreclosures. Most recently, it launched one in Manhattan against Joe Chetrit’s 1,300-unit apartment project in Two Bridges. It is also moving to foreclose on Aby Rosen’s massive site in Gowanus across from Whole Foods.