DOJ, Witkoff seek approval to sell Jho Low’s stake in Park Lane

Without a sale, the hotel faces default, loss of financing

New York /
Feb.February 02, 2017 10:31 AM

With The Park Lane Hotel hanging in the balance, developer Steve Witkoff and the U.S. Department of Justice have petitioned a federal judge to oust Malaysian businessman Jho Low from the project.

In a joint motion filed in Los Angeles, the DOJ and Witkoff TRData LogoTINY are seeking approval for their plan to sell Low’s 55 percent stake in The Park Lane, allowing Witkoff to move forward with development. Without a sale, court papers said, the hotel faces “default, loss of financing arrangements, and foreclosure.”

Low, who was accused of siphoning hundreds of millions of dollars from a state investment fund known as 1 Malaysia Development Bhd., or 1MDB, allegedly used those funds to purchase art, a private jet and real estate in Beverly Hills and New York — Including The Park Lane.

Witkoff has not been accused of wrongdoing, and court papers say he cut a deal with the DOJ in September and has been cooperating with authorities.

Federal prosecutors moved last year to seize assets held by Low, Including The Park Lane and several other high-end condos in New York.

Witkoff — along with investors Harry Macklowe and Douglas Elliman chief Howard Lorber — bought The Park Lane in 2013 in a deal that valued the property at $654 million. Low provided a majority investment with “proceeds derived from or involved in fraud,” according to court papers.

Plans stalled when the U.S. government moved to seize Low’s assets in July, preventing the developers from nailing down financing. But The Park Lane‘s cash flow isn’t enough to pay expenses related to development and to stay current on the site’s $480 million in debt, which comes due this year. Witkoff issued a capital call to investors, but Low defaulted on his stake, according to court papers.

Thus far, the developers have come up with the cash to stay current on its bills, according to the Journal. If Low’s stake is sold, court papers said, Witkoff and the other investors would reimbursed for Low’s share plus 12 percent interest.

Court papers said Low sold 45 percent of his 55 percent stake in the hotel to Mubadala Development Co., an Abu Dhabi sovereign-wealth fund. Mubadala recently began “to discuss the purchase” of Low’s remaining stake, subject to court approval, the Journal reported. [WSJ]E.B. Solomont


Related Articles

arrow_forward_ios
Condo board looks to evict buyer of heavily discounted 1MDB penthouse
Condo board looks to evict buyer of heavily discounted 1MDB penthouse
Condo board looks to evict buyer of heavily discounted 1MDB penthouse
From the rubble: How NYC real estate lived 9/11
From the rubble: How NYC real estate lived 9/11
From the rubble: How NYC real estate lived 9/11
Witkoff Group CEO Steve Witkoff, Simon and David Reuben and The West Hollywood Edition (Getty, Witkoff)
Reuben brothers look to foreclose on Witkoff’s West Hollywood Edition
Reuben brothers look to foreclose on Witkoff’s West Hollywood Edition
Steven, Lauren and Zach Witkoff with the Ritz-Carlton Residences, Miami Beach (Getty, Witkoff, Ritz Carlton)
Witkoffs buy condos at Ritz-Carlton Residences in Miami Beach
Witkoffs buy condos at Ritz-Carlton Residences in Miami Beach
Howard Lorber and Steve Witkoff (Getty, iStock)
Lorber, Witkoff launch $250M SPAC
Lorber, Witkoff launch $250M SPAC
Steve Witkoff and Ian Schrager in front of the iconic PUBLIC hotel escalators. (PUBLIC, Getty)
EB-5 fund alleges Schrager, Witkoff siphoned money from Public Hotel
EB-5 fund alleges Schrager, Witkoff siphoned money from Public Hotel
Charles Koch of Koch Real Estate Investments and 2777 South Las Vegas Boulevard (Getty, iStock)
Koch buys Las Vegas casino development
Koch buys Las Vegas casino development
Steve Witkoff and 4766 North Bay Road (Getty, Douglas Elliman)
Steve Witkoff buys waterfront Miami Beach lot for $8M
Steve Witkoff buys waterfront Miami Beach lot for $8M
arrow_forward_ios

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

Loading...