Cassa hotel portion in contract for $130M

TRD New York /
Apr.April 08, 2011 04:12 PM

Assa Properties has inked a “binding” contract to unload the hotel portion of its bankrupt Cassa Hotel and Residences for $130 million, the developer announced today.

Assa said the proceeds will be used to pay down the property’s debt, after which the condominium portion of the building — floors 27 through 48, which they say is worth more than $120 million — will be “firmly in their hands.” The buyer was identified in the announcement only as an “international investor,” and a spokesperson for Assa declined to comment further. 

Earlier this week, Assa’s Waterscape Resorts subsidiary filed for bankruptcy protection for the 70 West 45th Street project, which was completed in September 2010 and contains 165 hotel rooms and 57 condos. Today, seeking to clarify previous reports, Assa said the Chapter 11 filing “was an action to counter an outgrowth of lien filings totaling $20 million” from construction firm Pavarini McGovern, their contractors and subcontractors.

Late last year, Watergate had sued Pavarini for fraud, charging that it failed to obtain insurance coverage for potential defaults by subcontractors, even though it claimed that it did and had charged Waterscape some $200,000 in insurance premiums. Waterscape said the scandal wound up costing $30 million because of construction delays, though the work was ultimately completed. At the time the lawsuit was filed, Pavarini denied the allegations.

“We remain on target to our business plan and will soon be announcing our next project,” Solly Assa, CEO of the development company, said in a statement.

Assa Hospitality will stay on as manager of the hotel, which plans to announce a new chef and restaurant concept “in the coming weeks.” It is scheduled to open in four months, while a new public space and vertical garden is slated to open this season. TRD

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