The towering Crowne Plaza Resort — a as soon as brightly lit however now principally darkish skyscraper within the coronary heart of West Midtown — is entangled in a bitter authorized wrestle with no straightforward finish in sight.
Publicly traded developer/landlord SL Inexperienced owns a sliver of land beneath the 46-story tower at 1605 Broadway between West forty eighth and forty ninth streets. It claims that Argent Ventures, which owns the debt on the property, has turned it right into a “zombie constructing” on which it’s paying no taxes or payments, even whereas it collects rental revenue from the constructing’s workplace and retailer tenants, which stay open.
SL Inexperienced needs a Manhattan Supreme Court docket choose to nominate a receiver to handle the entire property, reopen the 795-room lodge, and to gather the income to repay the obligations — together with floor hire that it says Argent owes to SL Inexperienced.
In line with Inexperienced’s courtroom submitting, Argent owes a complete of over $16 million in property taxes and tens of thousands and thousands extra for labor, water and different costs.
Inexperienced views a receiver as essential to safeguard the constructing’s future and in addition to guard its funding within the land, which can doubtless rise in worth post-pandemic.
SL Inexperienced’s courtroom transfer 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 purchased the debt owed by Vornado Realty Belief, which was the lodge constructing’s managing companion and funding supervisor, at a deep low cost — $90 million for a $195 million mortgage — the Actual Deal reported on the time.
Vornado defaulted on a complete $274.35 million in debt on the location, in accordance with the corporate’s 10-Ok SEC submitting in December 2021.
Vornado owned all the land beneath the constructing apart from the small slice bought by SL Inexperienced. It snatched up the 11,000-square-foot parcel — about one-quarter of the full floor footprint — for $121 million in September 2021.
Penson then sued in an try to invalidate the acquisition, claiming that his firm had first refusal rights on any land sale
However SL Inexperienced says that beneath longstanding agreements on the location, first refusal rights have been reserved just for the “tenant” — i.e., to Vornado, which declined to match SL Inexperienced’s supply.
Argent, SL Inexperienced claims, isn’t a tenant as a result of it by no means took authorized possession of the leasehold. It declined to carry a common industrial code debt public sale — which it might have performed and would have allowed it to take title.
As an alternative, it merely changed Vornado managers with its personal folks whereas “cynically ignoring” all of its obligations, “equivalent to paying contractors, utilities, taxes and hire,” which “put the constructing and the land in danger,” in accordance with SL Inexperienced’s courtroom submitting.
However Richard Shindler, president of the Argent affiliate that controls the property, responded: “SL Inexperienced’s deliberate selection to accumulate a portion of the Occasions Sq. Crowne Plaza constructing in violation of [Argent’s] proper of first refusal has pressured [us] to start litigation to implement its contractual rights.”
He blamed the SL Inexperienced motion for holding up the lodge’s reopening and claimed that neither Argent nor its associates “has been paid one penny” because it acquired the mortgage and mezzanine loans.
Along with the lodge, the tower has greater than 196,000 sq. ft of workplace area, greater than 17,000 sq. ft of retail area together with an enormous Krispy Kreme outlet, and a 159-car parking storage.