Controversial ‘Ground Zero Mosque’ faces foreclosure


In downtown Manhattan, a legal storm brews once again over a site that captured national attention post-9/11, resurfacing in the courts and placing developer Sharif El-Gamal under the spotlight.

El-Gamal’s vacant property at 49-51 Park Place in Tribeca — once a site that, years ago, became the subject of controversy and was referred to as the “Ground Zero Mosque” — faces imminent foreclosure alongside his incomplete luxury condo tower, 45 Park Place, according to The Real Deal.

This looming legal action stems from an alleged default on a $7.5 million debt tied to the parcel, as detailed in court filings.

The foreclosure lawsuit, spearheaded by Blueberry Funding LLC, a lender from Lakewood, New Jersey, adds another intricate layer to El-Gamal’s decades-long drama at these locations.

Jeremy Doberman, representing Blueberry Funding, stressed the lender’s attempts to negotiate with El-Gamal before resorting to legal measures.

However, citing insufficient assurances, the lender proceeded with the legal filing, marking a pivotal moment in the ongoing saga.

51 Park Place photographed in 2013. J.C. Rice

“There comes a time when people’s assurances are no longer good enough and in order to get paid back, you have to take things to the next step,” Doberman told TRD. “This is what the legal filing represents.”

Transactions within private capital markets commonly involve debt exchanges, such as the acquisition of El-Gamal’s note by Blueberry Funding in 2021, in collaboration with Realty Capital Finance.

Notably, the debt lacks a personal guarantee, a standard feature in similar loan scenarios, and no additional senior lenders were uncovered during a property title search.

Patricia Riley of Southampton, N.J., center, participated in a demonstration opposing the proposed Islamic community center near Ground Zero in New York, Saturday, Sept. 11, 2010. AP

At the heart of this battle lies a 4,700-square-foot vacant lot, housing only the remnants of a construction crane looming over the adjacent, and incomplete, 45 Park Place.

The towering 43-story structure owes its existence to air rights transferred from this vacant parcel.

El-Gamal remains optimistic about resuming construction at the condo project next year, following a successful defense against a foreclosure lawsuit initiated by Malaysia’s Maybank.

However, since MSD Partners acquired Maybank’s $170 million position, the battle to foreclose on 45 Park Place has escalated to appellate courts in an attempt to overturn El-Gamal’s ownership preservation.

Supporters and opponents of the Islamic center lined up outside 51 Park Place during the height of its controversy. Dan Brinzac
Sharif El-Gamal in 2011. Warzer jaff

Throughout this turmoil, El-Gamal refrained from commenting on the foreclosure lawsuit concerning the vacant parcel, despite previous denials of control despite financial documentation suggesting otherwise.

The convoluted ownership history of the vacant site traces back to El-Gamal’s 2009 acquisition of a damaged building post-9/11.

Initially proposed as an Islamic center, the project gained notoriety as the “Ground Zero Mosque,” eliciting significant backlash and resulting in the project’s abandonment.

Despite the site’s contentious history, El-Gamal pivoted in 2014 to constructing opulent condos, securing a unique financing package with Sharia-compliant loans from Middle Eastern lenders.

From left, Sharif El-Gamal, the main developer of the Park51 project in lower Manhattan, Nour Mousa, Rana Sodhi, a Sikh whose brother was murdered in a hate crime on September 15, 2001 in Arizona and the Photographer Danny Goldfield, opening the center back in 2011. Warzer jaff
The center opened its doors to show a photo exhibit in its community space. Warzer jaff

Plans for a scaled-down Islamic museum on the site have stalled due to fundraising challenges and a lack of benefactors.

Presently, the site lies undeveloped, while the upper floors of the adjacent condo tower remain exposed to the elements — a result of project delays, controversies and legal disputes, perceived by US lenders as arriving too late to capitalize on Manhattan’s luxury condo market peak.

In a recent email, El-Gamal teased forthcoming “big announcements” for the beleaguered project, which runs parallel to his ongoing foreclosure battles, including the one involving his Times Square hotel, Margaritaville.

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