A Scarsdale affordable housing developer that fell $6 million short and nine months behind schedule on a Bronx project petitioned for bankruptcy protection three days before the property was scheduled for a foreclosure auction.
Valdesia Gardens Housing Development Fund Corp. declared $15 million in assets and $22.6 million in liabilities in a Chapter 11 Â reorganization case filed on Dec. 13 in U.S. Bankruptcy Court, White Plains.
“The filing of the Chapter 11 case was necessary to preserve the value of the estate and maximize a return to its creditors,” according to an affidavit by an outside restructuring officer, David Goldwasser.
He said the developer intends to complete the project and then embark on a marketing campaign to lease the property, finance it, sell it or auction it, “thereby giving creditors the best opportunity to be paid in full.”
Valdesia Gardens was formed in 2017 as a nonprofit corporation to build a seven story, 50,000-square-foot residential and retail structure on Prospect Avenue in the South Bronx.
The board members — the late Luis Baez, Leopoldo Baez, and Emanuel Kambanis — put up several million dollars for the project. And Valdesia Gardens borrowed about $13.7 million from Community Preservation Corp., a Manhattan nonprofit organization that invests in affordable housing.
The project is 85% completed, according to Goldwasser, and the developer needs $6 million and nine months to finish the work.
Valdesia Gardens owes $19 million to Community Preservation Corp., $2 million to NYC Housing Preservation Development, and $1.2 million to the Internal Revenue Service.
Its only asset, the Bronx property, is valued at $15 million in the bankruptcy petition. Goldwasser says it will be worth $25 million to $30 million upon completion.
The bankruptcy filings do not explain why the project faltered, but the petition notes that there are seven pending legal actions in Bronx Supreme Court. They include Community Preservation Corp.’s foreclosure action, four personal injury cases, fraud allegations, and a mechanic’s lien.
