Firm drops $130M to finish East Village project; Neighboring Bldg Prepares for Demolition

A long troubled real-estate project finally has its end in sight, thanks to a $130 million infusion into the budget of Madison Realty Capital, the private equity firm overseeing the building.

Construction of 14+C, the 165,000 sq ft mixed-use complex is underway on 644 E 14th Street, and with the new financing is expected to be completed within two years.

The funding consists of $102 million from Apollo Global Management and $27.6 million from Lionheart Strategic Management. MRC was able to further protect its solvency by abiding by Option B of the 421-a affordable housing tax break, which stipulates that qualifying companies must reserve 30 percent of its residential units as affordable housing, split between at least 10 percent for households earning no more than 70 percent of the area median income and 20 percent for households earning no more than 130 percent of the area median income. The tax break is set to expire, but the timetable allows for the building to be completed on time.

Opal Holdings bought the site from Brooklyn Rabsky Group for $23 million in 2016 but fell behind in loan payments. In 2020, MRC, which had lent money to Opal, took over the project for the price of $31.3 million. Once completed in what is likely to be the first quarter of 2026, the building, standing at 24 stories and 234 feet tall, will contain 196 apartments as well as retail and community spaces. The inner framework of the reinforced superstructure is nearly fully formed, and the building could start moving upwards as soon as the fall. But in finishing the building’s foundation, Opal may have caused significant damage on another.

Jeremy Lebewohl, a landlord who has run a neighboring five-story multifamily building at 642 E 14th Street since 1984, was irate to find that the firm’s construction work had inflicted at least $1 million worth of damages to his property, and sued Opal for $10 million in 2019.

While that lawsuit is ongoing, Lebewohl has been unable or unwilling to repair the damages. In November 2023, the city’s Department of Buildings, deeming the property to be unsafe, issued a vacate order that forced residents to leave. The department also confirmed that construction on the adjacent project was indeed the culprit. “Structural stability of building compromised due to construction operations taking place at 644 E. 14th Street. Heavy cracks in the exterior and interior in addition to separation noted at door frames and floor from wall...” said the document issued by the department at the time. “Heavy cracks in the exterior and interior in addition to separation noted at door frames and floor from wall,” it continued.

A spokesperson from MRC told the New York Post said that the developer “provided structural safety solutions” to Lebewohl at the outset of the project, but declined to provide Our Town with further comment.

Lebewohl, cutting his losses, filed plans to demolish the building that his lawyers say is now beyond repair, but several of the rent-regulated tenants are suing Lebewohl, hoping that a court will require him to fix the damages, allow them back into their homes, and reverse course on his demolition plans. They are aided by groups like Mobilization for Justice and Take Root Justice, who allege that Lebewohl knew about the structural damages for many years but never took action to address them.

Paul Messick, an attorney for the tenants, told Crain’s New York Business that Lebewohl cannot move ahead with demolition while litigation is still pending, but Lebewohl’s attorney disputed this claim. It’s not yet known how demolition might interrupt or otherwise affect construction of 14+C.