The investment in trouble is that of the 110 Green St. Development LLC, the developer behind the Viridian condo project in Brooklyn, NY. According to Luxist, the developers are seeking Chapter 11 protection and will be converting the condos into rental units instead to keep pace with the changing New York City real estate market.

Full Press Release
NEW YORK, Feb 18 (Reuters) – The developer behind a New York City luxury condo building partly funded by retired basketball star Earvin “Magic” Johnson has filed for bankruptcy, citing a drop in New York’s real estate market.

110 Green St. Development LLC, the developer of the 130-unit development called The Viridian in Brooklyn’s trendy Greenpoint district, is seeking Chapter 11 bankruptcy protection while it tries to convert the condos in the unoccupied building into rental apartments instead.

In court documents filed Feb. 5 in U.S. Bankruptcy Court in the Eastern District of New York, the developer said the “unprecedented decline in the real estate market generally, and Williamsburg/Greenpoint specifically” led it to conclude condos were not the best use of the property.

Canyon-Johnson Urban Fund — a private real estate fund focused on urban properties whose investors include Johnson, who played for the Los Angeles Lakers National Basketball Association team — has provided the development with $12.3 million in mezzanine financing. Mezzanine loans are backed by an interest in a property’s operating company, rather than by the asset itself.

The nationwide drop in real estate prices has not spared the New York City region.

The average price for a condo in North Brooklyn, which encompasses Greenpoint, a district popular with artists and young professionals, fell nearly 9 percent in the last quarter of 2008 from the previous quarter, according to data from real estate appraiser Miller Samuel Inc.

110 Green St. listed assets between $10 million and $50 million and liabilities in the same range, according to court documents, and has a loan of $35.75 million from the Bank of New York (BK.N: Quote, Profile, Research) in addition to the Canyon-Johnson Urban Fund loan.

The company said in the filing it has held talks with leasing company Citi-Spaces Real Estate Services about marketing the apartments as rental units, and said Fannie Mae showed “strong interest” in providing replacement financing once Viridian is rented.

The case is In re: 110 Green St. Development LLC, U.S. Bankruptcy Court, Eastern District of New York, Case No. 1-09-40860. (Reporting by Phil Wahba; Editing by Gary Hill)

The property has 447.8 acres of land, including 1886 ft of frontage on the Pedernales River and ownership in the Dead Man’s Hole swimming spot, this exclusive ranch also features a 4,241 sq. ft. main house with five bedrooms, five baths, and two living areas, a guest house, seven miles of biking trails, a pool and spa, and all the privacy you could ask for.

The Property is going from $12 million price. See photo of the Dead Man’s Hole swimming spot after the jump.