Google Maps
Free Upper West Side News, Delivered To Your Inbox
A long-simmering financial dispute involving the retail portion of Columbus Square has escalated, bringing the owners a major step closer to foreclosure.
Advertisement
Per a new report by Crain’s New York Business, the shareholders behind a roughly $400 million mortgage are seeking to foreclose on the Chetrit-led ownership group of the five-building retail complex anchored by Whole Foods, after what lenders allege is a second default on the loan.The lawsuit, filed Friday in Manhattan state Supreme Court, claims that Chetrit Org. principal Michael Chetrit and other owners stopped making required monthly payments last summer — and never resumed them, despite assurances that they would.
Columbus Square spans both sides of Columbus Avenue between West 97th and West 100th streets, with an additional address on Amsterdam Avenue. The development includes major national retailers such as Whole Foods, Target, T.J. Maxx, HomeGoods, and other commercial tenants. Above the stores sit large residential towers.
While the retail and residential components are physically intertwined, they are owned separately. The residential apartments were sold years ago to UDR and MetLife, while the Chetrit family and Stellar Management retained ownership of the retail spaces, which are structured as commercial condominium units.
The mortgage at the center of the case was originally issued by Wells Fargo in 2014 and later securitized. It is now overseen by trustee Wilmington Trust, with Mount Street acting as special servicer.
Under the terms of the loan, the owners were required to make monthly payments of approximately $1.9 million. According to the filing, those payments stopped in August and have not resumed. The suit alleges the defendants ignored two default notices — one in October and another on January 8 — despite earlier promises to cure the default.
In total, the owners are accused of owing $369.7 million, including principal, interest, late fees, and other charges.
Neither Chetrit nor the unnamed ownership entities have filed a legal response. Attorneys for the defendants declined to comment or did not return calls by press time.
Advertisement
The lawsuit also claims the ownership group may have violated the mortgage in another key way: by failing to deposit retail rent payments into a special account that lenders could access in the event of a dispute.According to the filing, those rent payments — from blue-chip tenants including Whole Foods and Target — did not appear for months, triggering an additional default.
An attorney for the defendants offered a different explanation in a November letter, arguing that retail tenants had instead sent rent checks to UDR. The residential owner is reportedly locked in its own legal battle with the Chetrit-led group over unpaid common charges dating back to 2021 and allegedly diverted retail rents to cover those costs — a move the defendants’ lawyer described as improper and possibly illegal.
Concerns about the financial health of the Columbus Square retail loan are not new. As ILTUWS previously reported, the commercial portion of the complex faced refinancing pressure as interest rates climbed, even as the residential apartments remained in good standing under separate ownership.
This latest development suggests those pressures have now boiled over into full-blown litigation — with the possibility that one of the Upper West Side’s most prominent retail hubs could ultimately change hands if the foreclosure proceeds.
For now, the stores remain open and operating, but the legal fight over Columbus Square’s retail backbone is entering a critical phase that could reshape ownership of a highly visible stretch of Columbus Avenue.
Have a news tip? Send it to us here!
