A real estate investment firm that financed the overhaul of a major bus station in northern Manhattan sued the Port Authority of New York and New Jersey, accusing the public agency of upending the planned bankruptcy sale of a retail leasehold and wiping out a $72 million loan from foreign investors, WSJ Pro Bankruptcy reported. New York City Regional Center LLC is seeking to recoup its losses through the lawsuit filed Monday against the Port Authority, which detailed problems with a chapter 11 sale for the retail leasehold at the George Washington Bridge Bus Station in Washington Heights. Funding to redevelop the bus station came through the EB-5 Immigrant investor program, which provides green cards to foreigners who invest $500,000 in certain qualified U.S. businesses. The development consortium, George Washington Bridge Bus Station Development Venture LLC, filed for chapter 11 in October 2019 amid cost overruns at the bus station overhaul and a dispute with contractor Tutor Perini Corp. Although the COVID-19 pandemic prolonged the bankruptcy, the developer struck a deal worth $100 million earlier this year with Monarch Alternative Capital LP, which agreed to assume the $72 million in debt funded through the EB-5 program. But Monarch backed out after the Port Authority, which owns the bus station, demanded that the buyer assume all outstanding liabilities under the ground lease and put $17 million into escrow for other problems at the property. Among the issues the Port identified were elevators that it said weren’t in compliance with fire and safety regulations, an allegation the developer said was false and not substantiated by an engineering firm it hired to check the elevators. The collapse of Monarch’s deal forced the developer to “hastily” enter into an alternative transaction with JMB Capital Partners LLC, which had been funding the bankruptcy case, Monday’s lawsuit said. JMB agreed to waive the chapter 11 loan and provide funding to cover additional administrative costs, according to the complaint.After the sale to JMB was approved, there was no money left to pay off the New York City Regional Center loan, court records show.
