Los Angeles hospitality firm Urban Commons has filed for bankruptcy on the hotel portion of the Wagner at the Battery, just weeks after a lender filed a petition to foreclose on the Lower Manhattan asset.
A company-controlled entity sought Chapter 11 protection Tuesday, according to court documents filed in the Southern District of New York.
In the filing, the company declared $22.9 million in claims against the property, the biggest of which is $13.7 million from the Battery Park City Authority. The agency is Urban Commons’ landlord on a ground lease at the site, 2-10 West Street across from Battery Park City.
Ichigo, an infrastructure firm based in Tokyo, holds $5 million in bonds against the property.
Urban Commons bought the hotel from a joint venture of Millennium Partners and Westbrook Partners in 2018. The hotel, which forms the base of a 36-story tower, has 298 rooms across 12 floors. Above it are 120 condo units.
The hotel closed when the pandemic began in early 2020 and has yet to reopen. Calls to the hotel go to a recorded message that says it is “temporarily closed.”
In an affidavit, Urban Commons blamed its insolvency on the Battery Park City Authority and George Tsunis, who headed the agency before being named U.S. ambassador to Greece. “Even before the Covid-19 pandemic, BPCA consistently forced debtors into financial distress,” the filing said.
Urban Commons claims it was pitching a rebranding of the hotel into a Luxury Collection by Marriott. The decade-old firm claims the authority ignored the repositioning plan, despite support for it from Tsunis. According to Urban Commons, this prevented it from giving assurances to lenders that the hotel would be profitable.
The bankruptcy filing comes about two weeks after Urban Commons’ lender, an entity tied to Westbrook Partners, attempted to foreclose on the hotel. That suit claims that Urban Commons defaulted on a $96 million loan that matured in December of 2020.
Taylor Woods, the founder of Urban Commons, responded to the lawsuit by saying that his firm “has no intention of ever giving up the property.” Woods claimed that his firm was prevented “from executing a well-planned and comprehensive renovation, including a substantial conversion of the hotel from the independent and generic brand into a vibrant and stunning first-class luxury hotel.”
Woods did not respond to a request for comment on the bankruptcy filing. Last year, facing fraud lawsuits for various deals, Woods testified in bankruptcy court that he had to sell his home in Laguna Beach to pay debts and still owed millions of dollars to friends, investors, former employees and business partners
“For three decades I’ve run a successful business and never had financial trouble” until the pandemic hit, Woods said, according to the Long Beach Post. “I hope to rebuild my good name and good reputation, just the same as it was.”
But this year has brought more troubles.
In April, hotel management firm Highgate sued Urban Commons, claiming that the latter failed to cover more than half of the $42 million in operating expenses for the property. The firm is also facing claims from the New York Hotel and Motel Trades Council and Con Edison.
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