April 14, 2024

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Crowne Plaza Hotel in Occasions Square entangled in authorized struggle

The towering Crowne Plaza Lodge — a once brightly lit but now largely dark skyscraper in the coronary heart of West Midtown — is entangled in a bitter legal wrestle with no simple close in sight.

Publicly traded developer/landlord SL Inexperienced owns a sliver of land beneath the 46-story tower at 1605 Broadway between West 48th and 49th streets. It promises that Argent Ventures, which owns the financial debt on the house, has turned it into a “zombie building” on which it is paying out no taxes or charges, even although it collects rental income from the building’s place of work and keep tenants, which continue being open up.

SL Green desires a Manhattan Supreme Court docket decide to appoint a receiver to control the complete residence, reopen the 795-room resort, and to obtain the earnings to pay out off the obligations — which includes ground lease that it claims Argent owes to SL Eco-friendly.

In accordance to Green’s court filing, Argent owes a total of above $16 million in property taxes and tens of hundreds of thousands far more for labor, water and other charges.

The Crowne Plaza Resort constructing as it presently sits, with the closed-up lodge at the top and the largely shut-up retail room at the bottom.
Steve Cuozzo

Green sights a receiver as required to safeguard the building’s long term and also to protect its financial investment in the land, which will most likely rise in value article-pandemic.

SL Green’s courtroom go is a counterpunch to debt holder Argent, which is owned by trader Arnold Penson.

The Crowne Plaza closed in March 2020. In December 2020, Argent acquired the debt owed by Vornado Realty Believe in, which was the hotel building’s managing spouse and investment decision manager, at a deep price reduction — $90 million for a $195 million home loan — the True Deal claimed at the time.

Vornado defaulted on a complete $274.35 million in financial debt on the web page, in accordance to the company’s 10-K SEC submitting in December 2021.

New York's Crowne Plaza Hotel on Times Squarec
The creating that residences the Crowne Plaza is at the heart of a lawful fight the lodge, which has almost 800 rooms, remains closed.
Alamy Stock Image

Vornado owned all the land underneath the constructing apart from for the tiny slice acquired by SL Inexperienced. It snatched up the 11,000-square-foot parcel — about one particular-quarter of the complete ground footprint — for $121 million in September 2021.

A manager mounted by Penson then sued in an attempt to invalidate the invest in, proclaiming that his business had initially refusal rights on any land sale

But SL Environmentally friendly states that below longstanding agreements at the area, 1st refusal rights ended up reserved only for the “tenant” — i.e., to Vornado, which declined to match SL Green’s give.

Historic picture of Crowne Plaza building
The hotel building was constructed in 1987 and has noticed a host of different floor-flooring tenants, including a former New York Sports Club and a now-closed cosmetics retail store. The Crowne Plaza Lodge is closed, but 1 actual estate problem wishes it to reopen.
Alamy Inventory Picture

Argent, SL Eco-friendly statements, is not a tenant mainly because it in no way took authorized possession of the leasehold. It declined to hold a universal business code credit card debt auction — which it could have performed and would have permitted it to consider title.

Alternatively, it merely replaced Vornado professionals with its personal people today although “cynically ignoring” all of its obligations, “such as paying contractors, utilities, taxes and hire,” which “put the creating and the land at threat,” in accordance to SL Green’s court docket submitting.

But Richard Shinder, president of the Vornado-owned entity that continue to legally owns the property, stated, ““SL Green’s deliberate selection to obtain a portion of the Periods Sq. Crowne Plaza building in violation of [the Vornado entity’s] proper of initial refusal has compelled [us] to start litigation to enforce its contractual legal rights.”

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

He blamed the SL Eco-friendly motion for keeping up the hotel’s reopening and claimed that neither Argent nor its affiliate marketers “has been compensated one penny” considering the fact that it obtained the mortgage and mezzanine financial loans.

In addition to the resort, the tower has much more than 196,000 sq. ft of place of work house, more than 17,000 square ft of retail area which includes a huge Krispy Kreme outlet, and a 159-vehicle parking garage.