Crowne Plaza Hotel in Times Square entangled in legal battle

New York Metropolis's Crowne Plaza Lodge constructing, which has been the positioning of a Hershey's retailer and a Krispy Kreme donuts, is on the middle of a authorized battle.

The towering Crowne Plaza Lodge — a as soon as brightly lit however now largely 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 earnings from the constructing’s workplace and retailer tenants, which stay open.

SL Inexperienced needs a Manhattan Supreme Courtroom choose to nominate a receiver to handle the entire property, reopen the 795-room resort, and to gather the income to repay the obligations — together with floor lease that it says Argent owes to SL Inexperienced.

Based on Inexperienced’s court docket submitting, Argent owes a complete of over $16 million in property taxes and tens of thousands and thousands extra for labor, water and different prices.

The Crowne Plaza Lodge constructing because it presently sits, with the closed-up resort on the high and the largely closed-up retail area on the backside.

Steve Cuozzo

Inexperienced views a receiver as essential to safeguard the constructing’s future and in addition to guard its funding within the land, which can probably rise in worth post-pandemic.

SL Inexperienced’s court docket 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 resort constructing’s managing associate 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 positioning, in accordance with the corporate’s 10-Ok SEC submitting in December 2021.

The constructing that homes the Crowne Plaza is on the middle of a authorized battle; the resort, which has almost 800 rooms, stays closed.

Alamy Inventory Photograph

Vornado owned all the land below 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 entire floor footprint — for $121 million in September 2021.

A supervisor put in by 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 below longstanding agreements on the location, first refusal rights had been reserved just for the “tenant” — i.e., to Vornado, which declined to match SL Inexperienced’s supply.

The resort constructing was in-built 1987 and has seen a number of various ground-floor tenants, together with a former New York Sports activities Membership and a now-closed cosmetics retailer. The Crowne Plaza Lodge is closed, however one actual property concern needs it to reopen.

Alamy Inventory Photograph

Argent, SL Inexperienced claims, is just not 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 may have carried out and would have allowed it to take title.

As a substitute, it merely changed Vornado managers with its personal folks whereas “cynically ignoring” all of its obligations, “corresponding to paying contractors, utilities, taxes and lease,” which “put the constructing and the land in danger,” in accordance with SL Inexperienced’s court docket submitting.

However Richard Shinder, president of the Vornado-owned entity that also legally owns the property, mentioned, ““SL Inexperienced’s deliberate alternative to amass a portion of the Instances Sq. Crowne Plaza constructing in violation of [the Vornado entity’s] proper of first refusal has pressured [us] to begin litigation to implement its contractual rights.”

Shinder characterised Argent’s position as “solely a lender” to Vornado.

He blamed the SL Inexperienced motion for holding up the resort’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 resort, 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.