Last year, Bauhouse Group’s Joseph Beninati unveiled ambitious plans to build a 950-foot-tall skyscraper at 3 Sutton Place, also known as 430 East 58th Street. Beninati defaulted on a $147 million loan in January, and the original lender for the deal, Gamma Real Estate, purchased the site and air rights for $98 million in a foreclosure auction last month. Now they’ve filed plans for an 844-foot-tall residential building on the property between First Avenue and Sutton Place.
The 67-story tower would have 389 apartments and 262,069 square feet of residential space. The first six floors would be devoted to mechanicals and amenities, including a kids’ playroom, gym, conference room, screening room, and lounge. The remaining 61 stories would host two apartments apiece.
Stephen B Jacobs Group filed the plans, but it’s unclear whether Gamma will stick with Bauhouse Group’s design, which came from Norman Foster.
However, Gamma may not develop the 6,000-square-foot property at all. The firm told The Real Deal last week that it had filed plans to “safeguard the property” while it figures out what to do next. N. Richard Kalikow’s company may search for a partner on the project, move forward on its own, or sell the site. “We’re just eager to get past the bankruptcy, past the foreclosure and put that behind us and really achieve the ultimate goal, which is to get repaid,” Gamma president Jonathan Kalikow said to TRD.
The property has had quite a year. In January, a neighborhood group tried to create a rezoning that would cap the heights of new buildings at 250 feet on blocks east of First Avenue between 52nd and 59th Streets. Then in February, Bauhouse defaulted on its high-interest loan to Gamma and decided to declare bankruptcy rather than allow the property to be taken in a foreclosure auction. Beninati sued Gamma in bankruptcy court and lost last month, with the judge ruling that a foreclosure auction would move forward on December 13.
Bauhouse originally spent about $42 million assembling the development site at 432-430 East 58th Street, including air rights from several neighboring apartment buildings. The firm may have even turned down a $45 million offer for the site last summer, Crain’s reported in early December.
The whole debacle has probably been illuminating for investors looking to pour money into high-end Manhattan condos. A broker involved in the foreclosure auction predicted that the 3 Sutton Place site could fetch up to $187 million. But it sold for slightly more than half that price, a sign that the city’s extremely pricey condo market is softening.