SL Green Realty has to promote its $120 million stake in Instances Sq.’s Crowne Plaza resort after a decide dominated that investor Andrew Penson has the proper to purchase it.
The Marc Holliday–led REIT and Penson’s Argent Ventures have been tussling because the fall for management of a small however strategic piece of land beneath the 795-room resort at 1601 Broadway, which is in default on its $330 million mortgage.
The possession of the property is as labyrinthine as a giant resort chain’s factors system.
The resort sits on a parcel of roughly 30,000 sq. toes, a few third of which had been owned for a very long time by the Walber household. The Walbers leased their part to Vornado Realty Belief, which owned and operated the resort.
Underneath the leases, Vornado had the primary proper to buy the Walbers’ property if it ever got here up on the market.
However in March 2020, the resort — like many throughout town through the pandemic — shut its doorways and fell behind on its mortgage. Penson got here into the image late final yr, when his firm purchased the mezzanine debt on Vornado’s leasehold for pennies on the greenback.
Penson’s Argent Ventures then changed Vornado’s managers on the resort and began sweeping the resort’s revenues to service the debt, leaving unpaid hire payments to the Walber household and delinquent tax payments with town.
In August, SL Green provided to purchase the Walbers’ property, triggering the resort proprietor’s proper of first supply. Penson argued that proper fell to the Vornado entity that held the lease, and despatched over a sale settlement and a $30 million deposit.
However the Walbers argued that Penson had nullified the association by changing Vornado’s managers. Penson sued to implement the contract however the Walbers went forward and offered the property to SL Green for $121 million.
A Manhattan Supreme Courtroom justice earlier this month dominated that Penson’s proper to buy the property was intact, basically ordering SL Green to promote its stake.
“They’re entitled to enforce what they bargained for,” decide Jennifer Schecter mentioned at a late March listening to.
A spokesperson for SL Green declined to remark, as did attorneys for the Walbers. Representatives for Argent Ventures didn’t reply to a request for remark.
Penson hasn’t seen his final day in court docket. The Riese household, which owns a small piece of property on the nook of West forty ninth Road and Broadway that’s been included into the resort, filed a lawsuit final yr claiming the resort owes greater than $1.8 million in hire.