The Real Deal New York

DelShah seeks hotel tenant for Meatpacking site, despite ownership dispute

February 26, 2013 03:30PM
By Zachary Kussin

From left: Michael Shah, 55 Gansevoort Street, a proposed rendering and Jeffrey Julien

With an ownership dispute ongoing, DelShah Capital is planning to lease a vacant Meatpacking District building to a tenant who could redevelop the five-story property as a boutique hotel, The Real Deal has learned. The 25,109-square-foot building, located at 55 Gansevoort Street, would come with a triple net lease, according to marketing materials.

A team from HFF comprised of Jeffrey Julien, KC Patel, Andrew Scandalios, Jose Cruz and Colin Oberg is handling the marketing, which went live late last week.

“It’s a blank canvas,” said Julien, a HFF managing director, adding that an investor should gut and redo the building. “The concept from our perspective was, you do a boutique hotel with a very nice ground-floor restaurant and potentially a rooftop bar — but that’s just our opinion. It’s up to the vision of the hotel developer.”

Pricing has yet to be determined, Julien said. His team will take offers or proposals sometime next month.

“We don’t have feedback yet,” Julien said.

DelShah had previously planned to renovate some floors inside the building to create office space, according to previous reports.

“I think a hotel is higher and better use,” said Michael Shah, principal and CEO of DelShah, adding that his firm hasn’t previously done hotels. “For our first one, we would like to triple-net lease or partner with someone who has experience in the hospitality sector.”

A battle over the ownership of the property heated up this past summer, as The Real Deal reported. DelShah announced that it had acquired title to the building, after a default on what insiders said amounted to $27.5 million in loans, and city property records show DelShah bought the defaulted mortgages in March 2012.

However, Orbis Capital Advisors — which had negotiated a joint venture with Robert Romanoff, a trustee of the former owner, GHC NY Corp. — claimed the transfer was invalid.

At the time, William F. Savino, an attorney for DelShah, told The Real Deal that the deed was legitimate. A copy of the deed signed by Romanoff’s father, Gerald, was later sent to The Real Deal. The deed still appears in public record.

However, Jeffrey Menaged of Orbis said the elder Romanoff was not authorized to sign the deed because the building was owned through a trust controlled by Robert and another non-family member, and only they could sign.

“Over the past year,” Savino previously told The Real Deal, “Robert has repeatedly on multiple instances attempted to thwart the transaction, but no judge has given him relief.”

In September, Romanoff filed a lawsuit in New York State Supreme Court against Shah, Gerald Romanoff and his attorneys, and other entities, claiming they devised a scheme to allow an unauthorized transfer of the property. The suit alleges that Gerald Romanoff improperly acted unilaterally on behalf of GHC NY Corp. to authorize the transfer of title to the building.

A hearing will be held this week on several motions to dismiss the case.

Along with this suit, Robert Romanoff filed a Chapter 11 bankruptcy petition on behalf of GHC. However, a federal bankruptcy judge dismissed the case, finding that he did not have authorization to file it on behalf of his father, and that he had filed the case in bad faith, according to a transcript of the oral decision.

Earlier this month, a Supreme Court judge ruled in a separate case to void the transfer of stock owned by GHC’s parent company, New Roads Realty Corp., to two trusts under the name of Robert Romanoff’s mother, Sheryl. In this case, Robert Romanoff argued that because the stock was allegedly owned by the trusts, then he had the right to control GHC as a co-trustee.

Robert Romanoff did not respond to requests for comment. Gerald Romanoff could not immediately be reached for comment.

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