A troubled Midtown condo project is sliding deeper into disarray as its developer faces another aggressive move from a lender.
Waterfall Asset Management is seeking to seize Rudy Gabsi’s stake in 611 West 56th Street after the developer allegedly ignored an eight-figure court judgment tied to the luxury tower, Crain’s reported. The firm filed suit in Manhattan Supreme Court to take control of Gabsi’s 90 percent interest in the 35-story, 80-unit building, according to the court filing.
In May, a judge ordered Gabsi to pay $92.1 million for defaulting on a 2016 loan backing the project. He never paid, the suit says, nor did he show up to defend himself. With interest and fees, the tab has climbed to $93.4 million.
Waterfall wants the court to authorize the sheriff to seize any documents needed to transfer Gabsi’s ownership stake. The lender wants a judge to reroute future condo-sale proceeds from the building directly into its hands.
Gabsi personally guaranteed the debt on the project, developed with Sumaida + Khurana.
Reaching him has proven difficult. His Leny Group lists no contact information and court records place him in Tel Aviv. Waterfall and its attorney, meanwhile, did not return calls from the publication.
The tower opened in 2022 on a gritty edge of Hell’s Kitchen known historically as Automobile Row, sporting an offering plan projecting a $232 million sellout. But units have been slow to move: nine sponsor apartments were still on the market Friday, priced from $1.1 million to $6.7 million.
The fight adds to a growing pile of setbacks for Gabsi, whose New York portfolio has been unraveling since the pandemic. His boutique condo at 534 West 29th Street was headed for auction this fall over a defaulted mortgage until he signed over the keys in a deed-in-lieu agreement.
Earlier this year, he also lost six mixed-use sites in Williamsburg through a bankruptcy process after defaulting on a $92 million note; CIM Group picked up the properties for $56 million.
— Holden Walter-Warner
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