WHO OWNS THE BLOCK Sale of a failed hotel on East 46th Street ends a messy development tale

Developers had hoped to sell condos there, then rent them for owners

BY C. J. HUGHES

The April 25 sale of a failed conversion project in Turtle Bay was yet another reminder of the spectacular stumbles of a development arrangement that sought to create luxury long-term-stay hotels on the backs of small-scale investors.

The site at 234 E. 46th St., near Third Avenue, was snapped up about a decade ago by Prodigy Network, a developer that had a mission to crowdfund projects for as little as $10,000 a pop. The firm proved deft at doing that. Crowdfunders kicked in $12 million for No. 234, which Prodigy purchased for $69 million in 2014, records show.

e following year the state’s attorney general approved an o ering plan that would turn the 20-story former rental building into a 95-unit condo, a plan that was to rake in $138 million. en, after the condo units were sold, Prodigy’s partner, the developer Korman Communities, would rent out the units on behalf of their owners as hotel rooms, which would presumably earn big fees for both the owners and Korman.

But the complicated plan never really got o the ground. Prodigy and Korman never even sold the bare minimum number of apartments to make the condo plan “e ective,” or o cial, which could have occurred by unloading 14 units.

Afterward, investors of all stripes, including banks such as the Canadian Imperial Bank of Commerce, which provided $81 million in conventional nancing for the project, started clamoring to be reimbursed. Multiple lawsuits followed. Complicating matters was the 2020 death of Rodrigo Nino, Prodigy’s founder and CEO, after which his company led for bankruptcy.

Ultimately, the Canadian bank foreclosed on No. 234, which led to April’s sale for $13.2 million, far less than what the buildings went for the last time around. e buyer, a Delaware-based shell company called 46 Turtle Bay, was represented by a Jeffrey Fields, according to the signature on the deed.

With the deal, three Prodigy-owned, AKA-branded projects in New York have now met their ends. e two others, in the Financial District, were 84 William St., which was acquired as part of a foreclosure sale by the Vanbarton Group in a 2020 deal valued at $74 million, and 17 John St., which is also now in Vanbarton’s hands following an $83 million deal, according to public records. e 84 William St. property has since been reborn as the Howell, a rental building.

But four AKA properties do survive in New York, including in Times Square and Sutton Place. A message left for Larry Korman, co-CEO of the Pennsylvania-based Korman Communities, was not returned by press time. ■

This 34-story residential high-rise, which extends through the block—a driveway runs to East 47th Street—is called the L’Ecole. When built in 1979, L’Ecole, developed by Goodstein Construction Company and designed by proli c architect Philip Birnbaum, offered rental units. But the partnership of Cammeby’s International Realty bought the site for $143 million in 2006 to undertake a condo conversion with $214 million in sales. Of the L’Ecole’s tenants, 10 seem to have chosen not to buy in or even to relocate. Indeed, the offering plan called for converting 261 units but leaving 10 alone. One retail space in the building features Barnea Bistro, a kosher French restaurant. Also at the site is a New York outpost of Lebanese American University.

The Durst Organization built this 23-story, 445,000-squarefoot of ce building in 1960. Durst remodeled the building to attain a gold ranking under LEED, a green rating standard that stands for Leadership in Energy and Environmental Design. Tenants today include Rosenberg and Estis, a real estate-focused law rm. Perhaps the building’s most infamous incident involved longtime retail tenant Sparks Steak House, whose entrance is at 210 E. 46th St. About 5:30 p.m. Dec. 16, 1985, four men wearing fur hats fatally shot mobster Paul Castellano as he emerged from a limo to enter the restaurant. Rival gangster John Gotti, who ordered the attack, apparently watched from a nearby car. In 1992 a court convicted Gotti of Castellano’s murder and other crimes. Gotti died in prison in 2002.

Edward Kimmel developed this 13-story apartment building in the 1950s with an apparent interest in attracting in the business leaders who were starting to populate Third Avenue. Indeed, Kimmel gave his project the name Executive House. In 1986 Kimmel, who also developed shopping malls under the name Kimco Realty, partnered with family members to turn the apartment house into a condo. A $35 million sellout was planned for the 129-unit project, according to the offering plan from the time. In 2002 Kimmel died at the age of 90. Four units, all studios, were for sale at the condo in late April, at prices ranging from $469,000 to $650,000. Investors seem to like the building, which does a brisk business in rentals. But some apartments have struggled recently to nd buyers, a situation likely made worse by Midtown’s decline as Manhattan’s main business district. One of the studios, No. 12G, has been on and off the market since 2017, dropping from $720,000 to $650,000 in those six years.

The charter that created the United Nations in the 1940s allowed countries to establish “permanent missions” in New York. The missions, tax-free holdings that function like embassies, largely speckle East 30th and East 40th streets. This squat 5-story structure, dating to the 1930s but with a much newer facade, was owned in the mid-20th century by the Gemological Society of America before being sold to the Republic of Venezuela in 1968. A few years later a burglar stole a typewriter, camera and $100 in postage stamps, according to a report in The New York Times. In 1990 the Commonwealth of the Bahamas picked up the 8,100-square-foot property, which city appraisers say has a market value of $3.1 million, and that country remains its owner today.

What looks like three tenements painted cheery shades of cerulean is in fact one property called the Blue Building. The site, once a stable and later an electrical supply store, is owned by the Dupler Group, which appears to have controlled the address for a long time. Indeed, online property records, which go back as far as the 1960s, indicate no change in ownership in that period. Today the Blue Building hosts weddings, fundraisers and recitals in gutted, industrial-looking spaces that feature tall ceilings and exposed-brick walls. There’s also a 1927 Steinway piano. In March the 19,000-square-foot site staged an opera, “Salvation,” the story of what happens when “a young woman with no memory of her past meets a stranger with the key to the riddle of her identity,” according to its ad.

This 20-story, 1986 residential building was a rental for years before the development team of Prodigy Network and Korman Communities snapped it up in 2014 in hopes of converting it into condos and, down the road, a long-term-stay hotel called AKA United Nations, a plan that never came to fruition. No apartments have turned over in the building since 2020, based on StreetEasy listings. The tower has a market value of $14.3 million, according to city tax of cials, which is about what a buyer paid for it in April. There are only one-bedrooms units in the building, which is one of several rentals on the block to have been considered for condo makeovers through the years.

From the late 1980s until the pandemic hit, this 5-story re-escape-laced structure housed an Italian restaurant called Grifone. But in 2022 the retail space in the prewar building started serving similar cuisine again, courtesy of Il Tinello, a restaurant that is an offshoot of one with the same name on West 56th Street.

The Viarengo family, which owned the building for decades, sold the 9,100-square-foot structure to Slate Property Group, an upstart developer, for $7.3 million in 2016. Upstairs are 15 apartments, from studios to four-bedroom units. A renovated two-bedroom unit with one bath and a dishwasher leased for $3,600 this month, based on its marketed rent on StreetEasy. Slate owns several rental buildings in the area, including 340 E. 52nd St., a 65-unit property near First Avenue that it purchased a year ago.