Two Rockland County developers have been sued for $68.4 million for allegedly defaulting on a housing project loan.
An affiliate of CoreVest American Financial Lender accused Samuel Pollak, of Spring Valley, and Zvi Horowitz, of Monsey, of breaching payment and performance guarantees, in a complaint filed on Dec. 10 in U.S. District Court, White Plains.
“Upon information and belief,” the complaint states, the men’s Kensington Village Apts LLC “diverted money to unauthorized bank accounts.”
Three years ago, CoreVest, of Irvine, California, loaned $84.5 million to Kensington Village Apts LLC, of Chestnut Ridge, Rockland County.
The money was to be used to buy, renovate, and manage the Avondale Village Apartments, on Kensington Road in Decatur, Georgia. The complex includes 998 apartments in 3-story garden-style structures.
The project was budgeted at $105.8 million: $76 million to buy the property, $21.5 million for renovations, $5.9 million in miscellaneous costs, and $2.5 million for financing costs.
Pollak and Horowitz personally guaranteed the loan payments, according to the complaint. But by September 2023, they had defaulted on the loan, and CoreVest negotiated a forbearance deal.
The developers stipulated that as of August 30, 2023 they owed $65.9 million and that they had failed to make several monthly payments, maintain minimum cash balances or provide financial information to CoreVest.
CoreVest notified the developers this past June that the forbearance deal had expired and that the project had incurred more defaults. They had failed to complete the renovations, lease enough apartments, or comply with cash management requirements.
None of the problems have been resolved, according to the complaint.
And on Oct. 30, Horowitz allegedly sold a portion of the Avondale property to a new entity. The transaction was made without CoreVest’s consent, the complaint states, and the new entity is allegedly owned, controlled or affiliated with Pollak and Horowitz.
Attempts to reach Pollak and Horowitz, for their side of the story, failed.
