Full Block Of UES Businesses Face Foreclosure As Bank Demands $12M

UPPER EAST SIDE, NY — The troubled landlord of a row of Upper East Side businesses is facing a foreclosure lawsuit, as a bank says his company defaulted on a multimillion-dollar loan, court records show.

The suit centers on the six ground-floor businesses at the Philip House Condominium: a 12-story luxury condo building that spans Lexington Avenue between East 88th and 89th streets. The Lexington storefronts are home to shops like Flowers by Philip, Patis Bakery, Pure Barre, and recently-closed businesses like Jack's Stir Brew Coffee and FIKA cafe.

The retail spaces are owned by Ashkenazy Acquisition Corp., led by billionaire developer Ben Ashkenazy.

But the lawsuit, filed this month by BankUnited, says that Ashkenazy has failed to make monthly payments since December 2020 on the mortgage that has governed the retail properties since 2011. Ashkenazy won a temporary reprieve by applying for a hardship declaration under New York's moratorium on commercial evictions and foreclosure — but that moratorium expired in January, allowing the suit to proceed

The bank is now asking a judge to force Ashkenazy to pay back $11.9 million in debts it has accrued, plus interest.

Philip House's retail spaces have been the subject of a flurry of other lawsuits since the pandemic began. In a separate suit filed last March, the building's board of managers accuse Ashkenazy of failing to pay nearly $66,000 in common charges for the six commercial units.

Meanwhile, Ashkenazy has itself filed lawsuits against two of its retail tenants, Jack's Coffee and Flowers By Philip, alleging unpaid rent. (Jack's has since closed permanently, and it is unclear how the foreclosures would affect the remaining businesses)

The situation at Philip House closely mirrors another legal battle at one of Ashkenazy's other properties: a retail space on Fifth Avenue in Harlem, where lawsuits claim Ashkenazy has also defaulted on a mortgage and failed to pay common expenses, as The Real Deal reported last month.

Also during the pandemic, Ashkenazy's five-story building at 690 Madison Ave. was foreclosed on, and a separate suit alleges Ashkenazy owes $1 million on a loan he had taken out for a Midtown retail space, Crain's reported.

Ashkenazy did not immediately respond to a request for comment.