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Last update - 01:29 25/12/2008 Big Apple souring for Lev Leviev By Michal Ramati and Michael Rochvarger Tags: lev leviev, africa israel  The downturn on the U.S. real estate market is taking its toll on businessman Lev Leviev and his company, Africa Israel, in New York. The Wall Street Journal has reported that Leviev filed an emergency injunction to wrest control of the Apthorp building, on the Upper West Side in Manhattan, from its current managing partner and 50% owner, Maurice Mann. The WSJ also reported that Leviev has been unable to lease renovated space in the old headquarters of the New York Times building that he purchased last year for $525 million. Leviev sold 50% of the New York Times project in August of last year to raise financing for the Apthorp project. Trouble at the Apthorp building has been brewing for some time. The building, built by the Astor family in the early 1900s, is located in one of the most exclusive areas in New York. Its past tenants have included actor Al Pacino, singer Cindy Laufer, TV personality Rosie O'Donnell and writer Nora Ephron. Nevertheless, many of the units are rent-controlled, and in such cases rates may be increased only when tenants vacate voluntarily. Advertisement Africa Israel bought the property in March 2007 in an equal partnership with Maurice Mann for $426 million with the intention of selling the apartment units at lucrative prices to cover the initial investment after extensive renovations. Mann has managed the renovation project. But according to the Wall Street Journal, only one unit in the building of 163 apartments has been sold in the six months since the $1 billion project was announced. According to the website of the real estate broker marketing the apartments, Prudential Douglas Elliman, eight apartments are now on the market with price tags ranging between $3.45 million for a two bedroom apartment to $15.5 million for a five bedroom unit. The average price per square meter in the landmark building is now $22,500, according to the StreetEasy.com website, which specializes in New York area properties - which is lower than the original asking price of about $33,000 per square meter, that would have brought in a total of $1.06 billion for the project, according to renovation plans submitted to the New York municipality. Meanwhile, the partners have become embroiled in litigation. On December 16 Maurice Mann, who is serving as the manager of the renovation project, filed a $500 million claim against Apollo Real Estate Advisors, which together with Anglo Irish Bank Corp. provided the $528 million financing for the renovation project. Last fall, as the New York real estate market tumbled and with falling prices and cost overruns, the business plan was called into question and Apollo and Anglo Irish made a capital call of $12 million from Leviev and Mann's joint holding company to balance the loan, which was paid. But earlier this month Apollo made another $22.7 million capital call and Mann responded with a law suit. According to the claim filed by Mann, Apollo is trying to extricate itself from its obligations. The claim was withdrawn the same day after a temporary agreement was reached with Apollo: the companies agreed to delay the payment until January 9th. Following Mann's lawsuit, Leviev has filed for an urgent injunction to transfer control of the building's management to Africa Israel, claiming that Mann's "woeful mismanagement has jeopardized the viability of the entire project, putting the loans in serious danger of imminent default," according to the Wall Street Journal. In his claim, Leviev alleged that Mann had used the joint company's account to finance his personal legal expenses and allowed workers to live in empty apartments in the building. "The Apthorp project has a number of management problems that remain to be solved," Leviev stated. "We are in the midst of litigation, which we believe is necessary in order to reasonably solve the differences. We are in contact with the project's financers, and feel confident that our actions will have no affect on the financing." Commenting on the New York Times building, a spokesman for Africa Israel said that the company is still in initial stages of renovations, and only now reaching a stage where space can be prepared to be leased. Nevertheless, the spokesman confirmed, "There is no doubt that the state of the office real estate market is more difficult today than it was when we bought the New York Times building." Bookmark to del.icio.us   Not so funny Jewish groups condemn a Belgian public broadcaster for airing Holocaust jokes. An endless nightmare An Indian paper reports the Mumbai terrorists tortured their Chabad House victims.

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