The Real Deal New York

Strip club claims eviction tied to Chetrit’s Hotel Carter buy

Cheetahs owner says establishment getting the boot to pave way for $190M acquisition
By David Jones | December 17, 2014 06:00PM

Lawyers for the Cheetahs Gentlemen’s Club and Restaurant are set to face off in court to block its eviction by the outgoing owners of the Hotel Carter — a move that they allege is linked to Joseph Chetrit’s $190 million deal to acquire the property.

The famed strip club, located at 252 West 43rd Street, was scheduled for a Dec. 15 hearing on its eviction from the 600-room property, which went into contract in August. That hearing was adjourned until Jan. 5, according to court filings released yesterday.

According to the complaint, filed in Manhattan Supreme Court, the Alphonse Hotel Corp., which owns the property, issued a default notice against the Cheetah Club, claiming a failure to maintain a $1 million liability plan and a $10 million umbrella insurance policy.

In a sworn affidavit, Domenica O’Neill, vice president of Three Amigos SJL Rest., the firm that owns the club, claims Alphonse Hotel has never complained about the insurance coverage since the firm took control of the property in 2010. She alleges that the eviction is due to the pending sale of the building to Chetrit.

The hotel, which had been placed into administration, was put up for sale earlier this year, with Eastdil Secured’s Lawrence Wolfe leading the process of finding a buyer.

Chetrit won the right to buy the property with a winning $125 million bid, but the hotel will reportedly need another $125 million in security and infrastructure upgrades.

John Cruz of GF Management, which is running the current hotel operation, said the hotel is doing very well, but confirmed that the deal closing was a “moving target” as it was originally set for today, but was pushed back until Dec. 23.

“This hotel is a cash cow, because it doesn’t have a mortgage,” he told The Real Deal.

Lawyers for the club confirmed plans to block the eviction, but did not return calls after the scheduled hearing. Lawyers for the hotel were not immediately available. Chetrit representatives did not return calls. Wolf was not immediately available for comment.