Manhattan Hotels, Land Valued at $200 Million to Hit Auction Block -Wall Street Journal - Land.Net News
September 4, 2015
A North Carolina real estate investment firm that owns the Wyndham Garden
Hotel and other Manhattan real estate put four properties into chapter 11
with a plan to sell them at a bankruptcy auction.
The four New York properties--three hotels and a vacant lot--are valued at
some $200 million and are located in choice neighborhoods across Manhattan.
The properties filed for bankruptcy protection Thursday at the U.S.
Bankruptcy Court in Manhattan amid a legal battle between their owners.
Gemini Equity Partners LLC, the Huntersville, N.C.-based owner of the
properties, has lined up initial offers for the hotels and land, subject to
higher bids at a bankruptcy-court-supervised auction. Proceeds from the
sales are slated to fully repay creditors, owed a total of about $135
million, according to Gemini vice president Christopher La Mack.
Gemini Real Estate Advisors LLC was formed in 2003 as a hotel-investment
vehicle by Mr. La Mack, Dante Massaro and William Obeid. Messrs. La Mack,
Obeid and Massaro each own 33.3% of both Gemini Real Estate Advisors and
Gemini Equity Partners, court papers show.
Last year, Messrs. La Mack and Massaro voted to remove Mr. Obeid as the
president of Gemini Real Estate Advisors, spawning a series of lawsuits that
have ensnared their investments.
The dispute, according to Mr. La Mack, has not interrupted the day-to-day
operations of the hotel, but the litigation has made it impossible to sell
the properties. In court papers, Mr. La Mack said he is concerned that the
value of the Manhattan properties could deteriorate if a sale is delayed
until the litigation concludes.
"All attempts to reasonably settle the litigation have been unsuccessful,"
Filing for bankruptcy automatically freezes all lawsuits against the
debtors. Should he win a judge's approval of the sales, Mr. La Mack can
pursue deals that transfer the properties "free and clear" of any claims
made by Mr. Obeid or others.
The Wyndham Garden Hotel in Manhattan's Flatiron district is the largest of
the three hotels with 124 hotel rooms and two one-bedroom suites. Gemini has
lined up a lead bid of $57 million for the property and hopes to pay off
debts of about $34 million.
The Jade Greenwich Village Hotel in Lower Manhattan has 113 guestrooms. The
hotel has attracted a lead bid of $78 million and carries about $51 million
in debt, court papers show.
The Best Western Seaport Hotel in the South Street Seaport Historic District
in Lower Manhattan has 72 guestrooms. Gemini intends to sell the Best
Western for $37.5 million, subject to higher offers, and pay off about $31
million in debt.
The undeveloped site, a 4,345 square-foot land parcel located near Bryant
Park in the heart of Midtown Manhattan, is approved for development as a
114-room hotel, according to Mr. La Mack. The site will be sold as a
"shovel-ready" lot for $25.5 million, unless the auction drives the price
higher. Gemini owes about $19 million on the properties, debt it plans to
repay in full with the sale proceeds.
In court papers, the investment firm has asked Judge James Garrity, who will
oversee the chapter 11 case, for approval to pay employees, access bank
account and otherwise continue normal operations at its hotels while the
sale process is underway.
Gemini also owns commercial real estate in Texas, Florida, North Caroline
and several other eastern states. Those properties, which have not filed for
bankruptcy, include a total of eight hotels in New York City and Boston,
according to the company's website.