A series of financial and legal challenges have surfaced for several prominent New York City real estate families.
Steve Croman is currently facing more than 28 active foreclosure lawsuits involving properties under his control. Lenders claim that entities tied to Croman defaulted on over $231 million in loan principals. In the past week alone, 21 of these suits were filed, many by lender Orange Owner LLC, with associated loans totaling more than $189 million. In response to a court filing, Croman denied many of the allegations against him.
Croman has previously been labeled as one of the city’s most problematic landlords and served an eight-month prison sentence for mortgage and tax fraud. Earlier this year, he was also sued by his own father.
The Ostad brothers—Michael, Edward, and Steven—are also involved in nine foreclosure lawsuits connected to loans exceeding $70 million. According to plaintiffs, they stopped making payments on these loans in April. That same month, Michael and Edward initiated legal action against Steven in an effort to dissolve their family partnerships. While Steven is named in three cases, his brothers are defendants in all nine suits. The older Ostads head Flatiron Realty Capital, a fix-and-flip lender; Steven founded Empire City Realty and Real Quick Capital, though both businesses now appear closed.
Alex Sapir is navigating a business wind-down process as Sapir Corp placed its Nomo Soho hotel into Chapter 11 bankruptcy protection. This move follows ongoing liquidation efforts at the Israeli-backed company and aims to facilitate a court-supervised auction of the 26-story boutique hotel at 9 Crosby Street. The goal is to use proceeds from the sale to address Sapir Corp’s $155 million bond debt across two Israeli bond series. The bankruptcy comes shortly after insolvency proceedings began in Israel; all directors have resigned and a trustee now oversees operations.
In another development related to city property disputes, developers selected for the Haven Green affordable housing project at Elizabeth Street Garden filed suit against New York City officials this week. Pennrose, Riseboro Community Partnership, Habitat for Humanity New York City and Westchester allege that the mayor unlawfully designated the site as parkland after they had been chosen in 2017 to build 123 senior housing units there.
They seek judicial intervention to reverse this designation: “They want the court to annul the parkland designation.”
Before November’s election, Mayor-elect Zohran Mamdani indicated support for moving forward with Haven Green despite resistance from outgoing officials: “After the Adams administration declared the land a park, Mamdani told reporters that pursuing the project would be ‘nearly impossible,’ as using city parkland for other uses would require action by the state legislature.” However, some observers suggest that recent legal action could potentially change this outlook.
Elsewhere in Manhattan’s Meatpacking District, questions arose regarding public-private partnership criteria after Kinwood Partners was chosen alongside Douglaston Development to construct nearly 600 housing units on city-owned land through an Economic Development Corporation (EDC) request for proposals (RFP). The RFP encouraged but did not require inclusion of an “emerging developer”—defined as one with limited experience based on specific project size thresholds.
Kinwood Partners fits these technical requirements but is led by David Himmel—a former chief operating officer at Jamestown who spent years working on local projects—and son of Leslie Wohlman Himmel of Himmel & Meringoff Properties investment firm. This selection prompted scrutiny about whether such designations effectively foster new entrants or simply benefit those with established industry connections.
