A weekend topic starting with Westfair Online in New York. "A visa investment fund is suing the developers of the MetLoft Bronxville condominiums for $5 million, claiming the project is in default. The allegations, at first glance, are simple: The loan was guaranteed by the developers. Now that the project is in default, they must repay the loan. But the MetLoft developers are also embroiled in a messy series of lawsuits, bankruptcies and dueling allegations of fraud."

"The $5 million came from a fund operated by Advantage America EB5 Group in Manhattan, a firm that finances real estate projects with money from foreign nationals. Foreigners who invest $500,000 to $1 million in projects that create jobs in the U.S. can obtain EB-5 visas and permanent residency. Advantage America loaned $5 million to the condo project in 2015, according to the complaint filed this month in New York County Supreme Court."

"The plan was to build 61 loft-style, luxury apartments with indoor parking, an indoor pool and a fitness center. But MetLoft, now known as EMC Bronxville Metropolitan LLC, defaulted on its loan obligations last year, according to the complaint. Attempts to reach a lawyer who has previously represented the developers for comment failed. Another group petitioned the court to force EMC Hotels & Resorts LLC, operator of the Time Nyack Hotel, into liquidation."

"The petitioners in both bankruptcy cases are asking the court to appoint a trustee to protect their interests. They claim that Edgar Melo Costa, 'a known fraudster,' has taken over both projects. Court filings allege that Costa, a Portuguese national, claimed he had sold a private jet company for $450 million but actually owes $1.5 million to companies in Portugal 'that he cheated out of money.'"

"Costa, the court filings stated, is associated with Brent Borland, who allegedly brokered MetLoft’s EB-5 financing. The U.S. Securities and Exchange Commission sued Borland in May for misappropriation of $6 million in an airport project in Belize. Neither Costa nor Borland were named as defendants in Advantage America’s lawsuit."

"Costa has hired Mercury LLC, a Manhattan 'high-stakes public strategy firm,' to defend his reputation. 'We work for Edgar Costa,' spokesman Chapin Fay wrote in an email, 'who has been the target of a smear campaign by former business associates.' The PR firm claims that the Wellingtons mismanaged the condo and hotel projects and that Costa discovered 'several instances of possible illegal activity' that contributed to the poor financial performance on the hotel project."

From VT Digger. "A swanky New York City condo regulators say former Jay Peak owner Ariel Quiros purchased with 'ill-gotten gains' from investors — and for a few nights was used by a sitting Vermont governor — has sold for nearly $4 million. A federal judge this week gave approval for the sale of Quiros' Fifth Avenue condo, with the proceeds going to investors and other creditors in his Vermont developments who regulators say he looted to buy the condo."

"That $4 million sale price is about $1 million less than the condo's initial listing price, and more than $3 million less than Quiros had tried to sell it for more than a year ago. The condo is part of a luxury 60-story hotel and condo complex, now known as The Residences at 400 Fifth Avenue, in midtown Manhattan, near the Empire State Building."

"Michael Goldberg, the court-appointed receiver now overseeing the assets at the center of the Jay Peak investor fraud scandal, filed the motion this week seeking a judge's approval to sell the unit for $3,995,000. Goldberg wrote in his filing that no offers came in for six months while the asking price was $4,950,000. That's when he lowered the price and soon after the $3.9 million offer came in, he wrote."

"According to court filings, Quiros and his wife bought the condo in December 2011 for $4,149,368, making the purchase with EB-5 immigrant investor money that he helped raise and which was meant to fund massive upgrades at the Jay Peak ski resort. In total, state and federal regulators say Quiros and Bill Stenger, Jay Peak's former CEO and president, misused $200 million of the more than $350 million they raised from foreign investors through the EB-5 visa program."

"Quiros, according to regulators, siphoned off $55 million for himself through the 'Ponzi-like' investor fraud scheme, paying off personal expenses, such as taxes, and buying the New York City condo. On May 27, 2016, a month after federal and state regulators filed securities charges against Quiros and Stenger, Gayles approved a motion on Quiros' behalf to take out a $1.5 million mortgage on the condo to pay 'reasonable' attorney fees and $15,000 a month in living expenses."

"Quiros then listed the condo for $7.2 million, but in September 2016 he 'terminated' the listing agreement. In June 2017, the condo was turned over to Goldberg, the receiver, with the judge ordering that he 'undertake his best efforts to market and sell the Condominium.' According to Goldberg's filing, the $3.9 million sale price is within the range for 'similarly size luxury, high-rise condominiums' in Manhattan. 'Moreover,' the receiver wrote, 'the property has been exposed to the marketplace, providing evidence of the actual value of the property based on the response of real-world buyers.'"

From Habitat Magazine. "Some 8,278 condo units are in the Manhattan development pipeline, and around 2,000 of those are expected to hit the market within the next year, according to an analysis by Halstead Property Development Marketing, Crain’s reports. A soft market could get downright squishy."

"The new development market has grown increasingly soft, especially for the priciest product, as projects planned after the height of the market in 2014 now come up for sale – joining many existing new buildings that have not moved all of their units. As a result, supply has grown. Halstead's first-quarter report showed around 6,000 apartments available in the borough, though some of those were being held off the market by developers until they can unload more units."

"Of the 2,000 units that will likely hit the market within the next year, some of the larger projects will be in Harlem, the Upper West Side and at the Waldorf Astoria, which is being converted to condos. The remaining condos, which total 6,242 units, are in development projects that were not far enough along to file sale documents with the attorney general's office. Many of these units, according to Halstead's numbers, are concentrated in Midtown South."