The long-delayed Hudson Steppe housing development in Ossining is now facing a $11.5 million mortgage foreclosure.
NH Ossining Lender, an affiliate of North Hill Capital Management, sued the developer, Ossining Land LLC, Dec. 29 in Westchester Supreme Court.
Hudson Steppe was proposed several years ago as an $80.5 million redevelopment of a former wallpaper factory.
The plan was to demolish everything but the historic Smith-Robinson House, and to build 189 apartments, recreational facilities and an underground garage. The apartments would be built into a slope overlooking the Hudson River. The historic building would be restored and used for offices.
Ossining Land, an affiliate of Orb Management Ltd., was formed in 2007 and is controlled by Barnet Liberman of Greenwich Village, Manhattan, and Stefan Malter of Bedford Corners.
By early 2017, the developers had secured planning and zoning approvals from the village of Ossining. Work was to begin in March 2017 and finish by early 2019.
The North Hill affiliate loaned $7.75 million to Ossining Land in late 2017, backed by a mortgage and other loan documents.
Then Ossining Land sued the North Hill affiliate in 2019. Ossining Land had defaulted on the loan and the lender was trying to sell partnership interests it held in the project.
“Due to unforeseen delays,” Ossining Land stated in the lawsuit, it had “lost all of the necessary approvals to move forward with the development.”
The complaint does not explain why the developer lost the government approvals. But it argues that allowing the North Hill affiliate to sell partnership interests would harm attempts to get new approvals, devalue the property and forestall the project.
The dispute was settled this past July, with Liberman and Malter conceding that they had no defenses and were obligated to repay the debt. Including interest and fees, as of July 15, they owed $11,434,359.
Now the North Hill affiliate is trying to enforce the settlement. NH Ossining Lender is asking the court to order the property be sold to pay off the debt.
The lawsuit indicates a new party of interest in the loan. The complaint was verified and signed by Jonathan Kloos of Metropolis Realty Advisors LLC as an authorized signatory for NH Ossining Lender.
Manhattan attorneys Stuart J. Glick, Vivian M. Arias and John M. Doherty represent NH Ossining Lender.
