The Story of One Madison Park Nears an End (Maybe)
We’ve covered, along with the rest of the real estate world, every development in the agonizingly drawn-out process of turning One Madison Park into an operational Manhattan condo, with little to show for it in terms of resolution -- though we now have some surprisingly intriguing (and sometimes exasperating) stories about the complications of real estate law. The legal limbo of One Madison has been frustrating considering how impressive this Manhattan condominium is, with a prime Gramercy location, notable architecture and covetous amenities. But today is a different kind of day. We have the happy task of reporting that this case of real estate stasis is apparently over -- or at least closer to over than ever before. A bankruptcy court judge in Delaware has recently approved a settlement that would resolve most of the financial claims bogging down One Madison, and grant official ownership jointly to the firms Related Companies and HFZ Capital.
For those who are new to this tale (or who just want a quick summation of the lengthy backstory), the story is basically that One Madison Park, a high-end luxury condo building on East 22nd Street, was almost completely constructed before the housing crisis caused a flurry of issues with its creditors. The three developers then began legal disputes over who could claim rightful ownership of the building. As its multiple financial disputes stalled in court over the past few years, final construction and development halted, leaving this luxury Manhattan condominium not quite finished and populated by a few lone residents.
The irony is that One Madison Park really is a beautiful building, with condos for sale that ought to sell themselves, which is why people are taking the trouble to stick with it through all the legal mess. In September Related Companies and HFZ Capital quit battling over ownership rights and agreed on joint control. They submitted a plan worth over $265 million. Now the building seems like it will be theirs, with one caveat: the bankruptcy-court judge also declared an auction in December for other bidders to offer new deals to creditors. Related Companies and HFZ Capital already own a sizable amount of the project’s debt, making any new deal unlikely, but it’s the wrinkle that keeps all of us watching this story. And it's a story that isn't quite over yet.