A dispute among lenders could soon halt construction of Sky View Parc, one of New York's biggest projects, throwing nearly 400 workers off the job.
The conflict over Muss Development's 3.3 million-square-foot retail and residential complex in Flushing, Queens, surfaced two months ago, when Arbor Realty Trust stopped paying monthly advances on its portion of the loan, according to sources close to the matter. Fearing that other lenders would also stop making payments, Muss ponied up about $4 million to cover Arbor's share.
The situation reaches a key juncture this week as lenders are slated to release their next portions. With Arbor showing no sign of resuming lending and Muss reluctant to dole out more cash, a crisis looms. Negotiations between Muss and its other lenders—led by Wachovia and Eurohypo AG—are at an impasse. That threatens funding for Sky View's first phase, which is supposed to be finished by this summer.
Industry insiders say one of the most troubling aspects is that the deal involves not some highly leveraged upstart but one of the industry's strongest players.
What a difference a month makes! Hey Joshua, you're not alone.