Chetrits, King & Grove break up hotel partnership

Hotel Chelsea deal is just one facet of end of business relationship

TRD New York /
Aug.August 27, 2013 10:32 PM

The split between the Chetrit Group, one of New York City’s most powerful real estate families, and boutique hotel brand King & Grove goes much deeper than a deal to transfer the Hotel Chelsea, The Real Deal has learned.

Ed Scheetz, the founder of King & Grove, has reached an agreement with brothers Joseph and Meyer Chetrit to split up their boutique hotel portfolio, following a prolonged internal dispute over the management of the Hotel Chelsea, in which the hotel brand was a minority owner.

Scheetz, the former CEO of Morgans Hotel Group, will take full control over managing the King & Grove brand, which includes Ruschmeyers in Montauk; King & Grove New York, King & Grove Lafayette and Hotel Chelsea in Manhattan; and King & Grove Williamsburg in Brooklyn, he said in a statement provided to The Real Deal. Scheetz has also agreed to manage the Tides in Miami on a transitional basis, on behalf of the Chetrit Group.

The Chetrit Group will keep the remaining hotel development properties, and will continue its existing commercial real estate business. Meyer and Joseph Chetrit were overseas and could not immediately be reached for comment, according to a company official.

The identity of Scheetz’s new investment partners is not yet clear, and it remains to be seen whether the Chetrit Group will partner with a new hotel operator to develop the remaining properties. Additional details on the future of the hotel group will be forthcoming in the next few weeks, Scheetz said.

For Scheetz, the move is unexpected, as he’d intended to use the partnership to expand the King & Grove brand, which had 14 sites either operating or under development, and had planned more than 3,000 rooms over the next three years.

However, Scheetz and the Chetrits had been battling behind the scenes over the operation of the Hotel Chelsea — still the home of rent-stabilized tenants — which the Chetrit Group acquired for $79 million in 2011. The company’s plans to convert the property into a King & Grove hotel met with numerous public relations snafus and construction hurdles, including a stop work order the Department of Buildings issued in May after a construction incident knocked out the building’s heat, hot water and cooking gas.

Scheetz informed the tenants that his firm acquired 100 percent of the equity after buying out the site from the Chetrit Group and David Bistricer’s Clipper Equity.

“We now own 100 percent of the hotel and we intend to make a number of significant enhancements to the way the property is managed and the manner in which the restoration is conducted,” said Scheetz in the memo to tenants.


Related Articles

arrow_forward_ios
Sharif El-Gamal, Joseph Chetrit and 1384 Broadway (Getty; Google Maps)

Chetrit Group sues Sharif El-Gamal for unpaid rent

Chetrit Group sues Sharif El-Gamal for unpaid rent
2870 Ocean Avenue and Isaac Chetrit, and 936 Home Street (Google Maps) 

Chetrit family’s dev site buy tops weekly mid-market sales

Chetrit family’s dev site buy tops weekly mid-market sales
Chetrit Group principal Michael Chetrit and 850 Third Avenue (850thirdavenue, iStock, Discovery Channel)

Chetrit battles Discovery Channel at 850 3rd Avenue

Chetrit battles Discovery Channel at 850 3rd Avenue
150 East 86th Street (Google Maps)

Barnes & Noble closing on Upper East Side

Barnes & Noble closing on Upper East Side
The Hotel Chelsea (Credit: Ben Hider/Getty Images)

Chelsea Hotel owner notches court win over work at iconic property

Chelsea Hotel owner notches court win over work at iconic property
110 East 76th Street and Joseph Chetrit (Credit: Google Maps; Sylvain Gaboury/Patrick McMullan via Getty Images)

Joseph Chetrit sells UES townhouse for $25M

Joseph Chetrit sells UES townhouse for $25M
The Chelsea Hotel at 222 West 23rd Street and Ira Drukier (Credit: Google Maps; Drukier by Jared Siskin/Patrick McMullan via Getty Images)

Chelsea Hotel renovation amounted to tenant harassment, city says

Chelsea Hotel renovation amounted to tenant harassment, city says
Joseph Chetrit and 88-20 153rd Street (Credit: Getty Images, Google Maps)

Chetrit plans fifth apartment building at Jamaica hospital site

Chetrit plans fifth apartment building at Jamaica hospital site
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...