The Real Deal New York

Elliman tapped to market Setai Fifth Avenue

May 09, 2011 12:58PM
By David Jones

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Elliman’s Karen Mansour and 400 Fifth Avenue

Prudential Douglas Elliman will officially be named the new broker for the Setai Fifth Avenue, the luxury hotel and condominium from developer Bizzi & Partners, which now faces an amended lawsuit from the Setai Group for another $50 million, The Real Deal has learned.

Karen Mansour, the director of development marketing at Elliman, will lead the new sales team, hoping to raise flagging sales at the 400 Fifth Avenue tower, which includes a 214-room hotel and a 184-unit condo.

Sales previously had been managed internally by Elida Jacobsen Justo, director of sales at the Setai, who previously told The Real Deal that nearly 50 percent of the units had been sold.

A source familiar with the brokerage said an announcement would be forthcoming from the developer, but declined to comment on the specifics of the statement.

Meanwhile, the Setai Group has amended a previously filed lawsuit and now seeks a total of $51.4 million from the developers.

As the Wall Street Journal originally reported, the Setai Group filed a $1.4 million suit against the developers in November 2010, alleging they failed to pay a monthly fee to the company and wrongly identified Capella Hotels & Resorts, which operates under the name West Paces, as a manager of the Setai, when that firm was approved only to do consulting work.

Setai Group and Capella are actually competitors in the hotel business.

“In particular the association of the Capella name with promotional materials for the hotel give the impression that Setai and Capella are somehow associated with one another or are working together at the hotel, or that Setai is no longer in the business of managing and operating high-end luxury hotels and resorts, neither of which is true,” wrote Ira Sacks, attorney for the Setai Group, in the amended complaint.

The amended complaint also alleges that Honua Investment Management, a Honolulu-based firm, pulled out of a deal to buy certain portions of the hotel and a condo unit, which if completed, would mean that the Setai Group would have been named manager of the hotel.

“As a result of 400 Fifth’s failure to meet the brand standards and Honua’s resultant refusal to complete the purchases set forth in the Honua agreements, Capella/West Paces has been named manager of the hotel instead of the Setai,” Sacks wrote.

Streeteasy.com records show that prices were slashed on a number of units. For example, the price of a three-bedroom penthouse measuring 3,590 square feet was cut 16 percent to $13.5 million in January from $16 million. City financial records show that unit closings began in December 2010.

Elliman declined to comment. A spokesperson for the developers did not have any immediate comment. A spokesperson for Capella referred calls to the developers. And Honua officials were not immediately available for comment.

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