The Margaritaville Resort Instances Sq. Lodge in New York Metropolis has lately discovered itself within the heart of a authorized dispute.
In a transfer over the weekend, 560 Seventh Avenue Proprietor Secondary LLC, which has a 100% membership curiosity within the lodge, submitted a petition for Chapter 11 chapter. It did so within the U.S. Chapter Courtroom for the Southern District of New York to “keep a UCC foreclosures public sale” of the Jimmy Buffett-themed lodge within the coronary heart of New York Metropolis, in response to the LLC’s submitting.
The LLC’s transfer to file for chapter got here after it took its senior mezzanine lender, AREPIII MVTS, LLC, to state courtroom to attempt to cease the foreclosures public sale and was unable to do this, the chapter petition stated. Monday had been the goal date for that bidding sale.
Media shops have linked the lender to Arden Group. For the Margaritaville Resort Instances Sq. Lodge, that actual property funding administration firm put up a senior mezzanine mortgage value $57 million, in response to a 2022 press launch.
Within the chapter submitting, the LLC disclosed between $100 million and $500 million in estimated liabilities on prime of belongings valued in the identical vary. It particularly talked about two loans and a mortgage lien that collectively added as much as $309 million. It has beneath 50 collectors.
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Sethian Pomerantz, president of the LLC and govt vice chairman of Margaritaville Resort Instances Sq. Lodge developer and proprietor Soho Properties, stated within the submitting that refinancing its “present mortgage and mezzanine debt primarily based upon negotiated pay-offs with collectors” was the “final enterprise purpose.” The refinancing could possibly be achieved “inside an affordable time frame,” he argued within the submitting, citing the “projections for future revenue, the appraised worth of the Lodge, and the stable location in Instances Sq. the place tourism is reviving.”
Earlier than 2024 involves an in depth, the 234-room Margaritaville Resort Instances Sq. might herald over $25 million in revenues offered that “varied vacant retail area is leased,” in response to the chapter petition.
The lodge skilled “working shortfalls throughout its stabilization interval” in 2021, one thing the president attributed to pandemic-related difficulties within the sector. It began welcoming company in the summertime of that 12 months.
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The chapter submitting stated Margaritaville Resort Instances Sq. has a worth within the $266 million to $350 million vary. It would “seemingly” comply with the LLC into Chapter 11, in response to the petition.
Soho Properties CEO Sharif El-Gamal, in addition to Flintlock Building Companies founders Andrew and Stephen Weiss, have been hit Tuesday with an almost $86 million authorized motion in connection to the mortgage the Margaritaville Resort Instances Sq. Lodge proprietor defaulted on and the chapter submitting, in response to Crain’s New York Enterprise. That lawsuit reportedly got here from Arden Group and Corten Actual Property Companions.
The 2 entities alleged El-Gamal and the Weisses ought to be held personally accountable for the mortgage, per the outlet.
FOX Enterprise reached out to Soho Properties and the Weisses for touch upon Tuesday lawsuit. Arden Group and Corten Actual Property Companions declined to remark.
In a Monday assertion to FOX Enterprise, Margaritaville Chief Funding Officer Evan Laskin confirmed the foreclosures public sale for the Instances Sq. lodge, which belongs to its present house owners “beneath a license settlement with Margaritaville,” had “been delayed.”
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“The chapter submitting is not going to affect resort operations, the property will stay open and workers members employed,” he stated.
Laskin’s assertion continued that the lodge “continues to carry out properly, with excellent satisfaction rankings,” including that Margaritaville “appears ahead to delivering enjoyable and escapism by means of the resort and restaurant experiences for company and New Yorkers for a very long time.”
Instances Sq. averages nearly 360,000 pedestrian guests each day every year, in response to the Instances Sq. Alliance. In Could, it noticed about 305,500 per day.