Staten Island, NY – The global credit crisis is hobbling Staten Island’s leading real estate developer and threatening some of his largest projects here with foreclosure.
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Builder Leib Puretz is in default with $67 million in signature developments, including 101 new condominiums at Bay Street Landing in St. George, a South Shore site where an outlet mall is planned and another North Shore spot where two tall residential towers are envisioned.
Capital One bank, which received billions in taxpayer bailout money, is foreclosing on $34 million in mortgages Puretz took to build The Pearl, a former warehouse retrofitted with high-end apartments at Bay Street Landing. The building includes penthouse apartments with views of Manhattan and Brooklyn.
Representatives for Puretz said the vise cutting off credit markets and delays in getting certain approvals from the city combined to put the projects in jeopardy. The turn in the housing market delivered the final blow.
A private equity lender started foreclosing on another $33 million in properties that Puretz’s companies own in St. George and along the waterfront in Richmond Valley. The latter is where an outlet mall with 60 stores is planned.
James Prendamano of Casandra Properties, which has marketed many of Puretz’s projects, said the developer was current on loan payments on all his projects but unable to pay the notes or refinance when they came due.
“It’s a sign of the times,” said Prendamano, a broker. “When a mortgage comes due, what traditionally happens is you go out and find additional credit, take out new credit or you go back to the lender, but the banks are not lending anymore. Banks are hoarding their cash and not lending.
“It’s not just a Staten Island problem. This is a global issue that people are dealing with all over the world,” added Prendamano, who remains confident Puretz will renegotiate his loans and move forward with the projects.
Capital One started foreclosure on the Bay Street Landing building Feb. 5. Similar actions followed Feb. 6 for an undeveloped site on Stuyvesant Place and Hamilton Avenue, where Puretz hopes to build two residential towers.
Then last week, waterfront property Puretz purchased at the foot of Richmond Valley Road in Richmond Valley moved into default. Garrison Special Opportunities Fund is seeking repayment of $21.1 million for that property, where an outlet mall is planned, and another $12.5 million for the Stuyvesant Place site.
The February filings in the County Clerk’s office are the first step in a lengthy process that could be resolved long before foreclosures are complete and properties sold at auction. Some real estate experts who requested anonymity said Puretz could be using foreclosure as a way to modify the loans. With so much at risk, lenders might be forced to renegotiate.
“This could either be a case of poor cash flow with the businesses, or he could be assuming this as a bargaining position — or it could be both. It’s hard to tell,” said one attorney.
But the foreclosure threatening the last phase of Bay Street Landing is a real concern for the hundreds of residents who live in existing co-ops and condominiums on the waterfront. Warehouses there were first converted to loft apartments in 1982.
“We were really shocked,” said Lena Delvaron, president of the Bay Street Landing Homeowners Association. “We want to see them finish the project.”
Ms. Delvaron said the homeowners association has a web of regulations, but tried its best to accommodate Puretz as he renovated the last vacant building there. She called the completed apartments “beautiful.”
One major snafu involved hooking up a sewer line. Prendamano said original plans for the water hookups and the pumping station were missing and developer hired an engineer to draw up new plans and apply for a permit. Puretz is still waiting for that city permit and has been unable to start selling units, he added.
The developer is selling units at The Pointe, another upscale building Puretz constructed at the foot of Victory Boulevard and Bay Street, and The View, an eight-story condominium at the corner of Nicholas Street and Richmond Terrace, but those sales are also stunted by the credit crunch, said Prendamano.
Puretz, who owns hundreds of apartments around the city, talked to the Advance last year but declined to be photographed, basing his refusal on an Orthodox Jewish belief. He did not return phone calls seeking comment on the foreclosures.
Public records at the Richmond County Clerk’s office show Puretz took a $30 million loan and another $4.6 million loan for the Bay Street Landing condominium in 2005 from Norfolk Bank, which was later bought by Capital One. He was expected to pay back the loans in January of last year but was able to extend the payment until July.
When he was unable to pay the note in July, Puretz entered into two forbearance agreements with the bank. Such agreements usually suspend payments for a period of time but require interest be paid back when the mortgages are paid. Those forbearance agreements expired Jan. 15, and interest payments of $18,716 a day on the $30 million have been accruing since Feb. 1.
The $21 million note on the Richmond Valley property was due in November and Puretz was unable to renegotiate.
Reb Leib is a tremendous baal tzedakah and anav. He dosen’t flaunt his money at all and is known only because of the amounts of tzedakah he gives.
May he and all yidden have the parnassah they need.
May HKBH bless Reb Puritz with hatzlacha in honor of his tzedakah which has helped so many and will continue to do so in the future. May HKBH bless his people with shalom.
puretz is a good man. I wish him the best of luck
doesn’t he own the big lot on 18th ave and 53rd st in bp?
what are his plans for that site, is that also in foreclosure?
What is the Orthodox Jewish belief that one cannot be photographed. I learned in yeshiva for umpteen years and never once learned about this prohibition on being photographed.
he owns 18 and 53 the plan wasnto make an hotel and a wedding hall that plan is on hold right now couse of his investor was messed up with bernie madofff
Trust me he’s not the only frum yid in this situation. I know many developers that will make him look like a hero (I mean they are bieng foreclosed on a lot smaller amount)
things that used to sell for Millions are selling for a fraction of that how do you expect developers to finish when the banks took the money and stashed it away. thats really fraud, had a private person done so he would of been prosecuted and put in jail for missusing federal funds. what a shame on the banking industry.
There is a belief among some against being photographed. In the old days certain Chassidishe Rebbes were againt photos. Though that belief is not as widespread as in the past, it still survives to a degree.
Sadly many “good people” are losing their money. Thsi is a Makas Medina where no one is being spared. First it was the stock market tanking then Madoff, then Stanford etc. Hashem is showing that no money is safe by any human. Even the great Buffet is having big time trouble.
He has a big project in monticello. He is a big Bal Tzedaka in a very hidden way.
rav leibel and his whole family (children) are the bigest balai chasidem that I know,(and I am involved in many organizations) they care for evrey needy cause as if it is their own rav leibel I want you to know that klal yisroel is davening for you let us all daven for him and let this be the end of all pain with the arrival of moshiach
His son Ari is the nicest guy I have ever met, he has a heart of pure gold and is a very Chosheve Talmid Chochom who is a Rosh Kollel in a different part of Staten Island. He would literally give you his shirt of his back, ,You could never tell that any of them come from money! A family to learn from.
kudos to number 14; lakewood maven, you couldnt have said it better. i just didnt know that he was a rosh kollel. from that alone you can learn!!
The whole family is amazing
Reb Puritz is mamash taka the finest baal chesed i know. He is mamash an angel from shamayim.
can we have more upted info. on this article thank you
He is really a major baal chesed and gives tzedakah lifnim meshuras hadin. May the borei olam on the yom tov of purim change the gzar din and allow the Puretz’s of this world to continue in their amazing charitable endeavors.