Where do you want to travel?

Hotel Advance Search

Crowne Plaza Hotel in Times Square entangled in legal battle

Crowne Plaza Hotel in Times Square entangled in legal battle


The towering Crowne Plaza Hotel — a once brightly lit but now mostly dark skyscraper in the heart of West Midtown — is entangled in a bitter legal struggle with no easy end in sight.

Publicly traded developer/landlord SL Green owns a sliver of land beneath the 46-story tower at 1605 Broadway between West 48th and 49th streets. It claims that Argent Ventures, which owns the debt on the property, has turned it into a “zombie building” on which it is paying no taxes or bills, even while it collects rental income from the building’s office and store tenants, which remain open .

SL Green wants a Manhattan Supreme Court judge to appoint a receiver to manage the whole property, reopen the 795-room hotel, and to collect the revenue to pay off the obligations — including ground rent that it says Argent owes to SL Green.

According to Green’s court filing, Argent owes a total of over $16 million in property taxes and tens of millions more for labor, water and other charges.

Crowne Plaza Hotel
The Crowne Plaza Hotel building as it currently sits, with the closed-up hotel at the top and the largely closed-up retail space at the bottom.
Steve Cuozzo

Green views a receiver as necessary to safeguard the building’s future and also to protect its investment in the land, which will likely rise in value post-pandemic.

SL Green’s court move is a counterpunch to debt holder Argent, which is owned by investor Arnold Penson.

The Crowne Plaza closed in March 2020. In December 2020, Argent bought the debt owed by Vornado Realty Trustwhich was the hotel building’s managing partner and investment manager, at a deep discount — $90 million for a $195 million mortgage — the Real Deal reported at the time.

Vornado defaulted on a total $274.35 million in debt on the site, according to the company’s 10-K SEC filing in December 2021.

New York's Crowne Plaza Hotel on Times Squarec
The building that houses the Crowne Plaza is at the center of a legal battle; the hotel, which has nearly 800 rooms, remains closed.
Alamy Stock Photo

Vornado owned all the land under the building except for the small slice purchased by SL Green. It snatched up the 11,000-square-foot parcel — about one-quarter of the total ground footprint — for $121 million in September 2021.

A manager installed by Penson then sued in an attempt to invalidate the purchase, claiming that his company had first refusal rights on any land sale

But SL Green says that under longstanding agreements at the location, first refusal rights were reserved only for the “tenant” — ie, to Vornado, which declined to match SL Green’s offer.

Historic picture of Crowne Plaza building
The hotel building was built in 1987 and has seen a host of different ground-floor tenants, including a former New York Sports Club and a now-closed cosmetics store. The Crowne Plaza Hotel is closed, but one real estate concern wants it to reopen.
Alamy Stock Photo

Silver, SL Green claims, is not a tenant because it never took legal possession of the leasehold. It declined to hold a universal commercial code debt auction — which it could have done and would have allowed it to take title.

Instead, it merely replaced Vornado managers with its own people while “cynically ignoring” all of its obligations, “such as paying contractors, utilities, taxes and rent,” which “put the building and the land at risk,” according to SL Green’s short filing.

But Richard Shinder, president of the Vornado-owned entity that still legally owns the property, said, ““SL Green’s deliberate choice to acquire a portion of the Times Square Crowne Plaza building in violation of [the Vornado entity’s] right of first refusal has forced [us] to commence litigation to enforce its contractual rights.”

Shinder characterized Argent’s role as “solely a lender” to Vornado.

He blamed the SL Green action for holding up the hotel’s reopening and claimed that neither Argent nor its affiliates “has been paid one penny” since it acquired the mortgage and mezzanine loans.

In addition to the hotel, the tower has more than 196,000 square feet of office space, more than 17,000 square feet of retail space including a huge Krispy Kreme outlet, and a 159-car parking garage.



Source link

Submit a Comment

Your email address will not be published. Required fields are marked *

Explore Latest Hotel Deals

The Ritz LondonThe Ritz London $605St James, London
Hotel Nikko PrincessHotel Nikko Princess $126Kyoto, Japan
Sheraton NassauSheraton Nassau $129Nassau, The Bahamas
The Plaza New YorkThe Plaza New York $510Midtown, New York City
%d bloggers like this: