The dream is not over.
Sharif El-Gamal’s Soho Properties, in partnership with MHP Real Estate Services and Flintlock Construction Services, is in late-stage negotiations to revive their plans for a distressed Times Square site once slated for a Dream Hotel. Now, the developers are working out a deal to build a Margaritaville hotel and restaurant, the first of its kind in New York City, The Real Deal has learned.
The Related Companies is expected to provide a $180 million construction loan for the project at 560 Seventh Avenue by year’s end, according to sources familiar with the negotiations. Related, which launched a $2 billion fund for commercial real estate debt last year through its subsidiary Related Fund Management, would not serve as an equity partner.
Though the exact size of the Margaritaville hotel was not immediately clear, sources said it would be similar to the Dream Hotel the developers once envisioned: 29 stories, 243 hotel rooms and nearly 120,000 square feet.
Representatives for Related, Soho Properties and MHP declined to comment, and a Margaritaville spokesperson could not be reached.
This is not the first time that singer Jimmy Buffett’s hospitality brand was in talks to plant its flag in the city. The owners of the Brill Building were negotiating a 25,000-square-foot lease with Margaritaville last year, until talks broke down. That Midtown office property, at 1619 Broadway, fell into foreclosure earlier this year.
There are also Margaritaville hotel resorts in Florida, Mississippi, Tennessee, Louisiana and the Cayman Islands. The new Broadway musical “Escape to Margaritaville,” featuring Buffett’s songs, is opening in New York in March.
El-Gamal and Norman Sturner’s MHP acquired the site, formerly the home of a Parsons School of Design at the New School building, for $62.3 million in 2014 — and then tacked another $9.2 million in air rights in 2015. The owners defaulted on the mortgage from Colony Capital earlier this year. Colony then shopped the $63 million note and in May sold it to investor Eli Cohen, who has not yet moved to foreclose on the property.
El-Gamal meanwhile is developing a 43-story luxury condominium at 45 Park Place in Tribeca, and Related recently closed on the $234 million purchase of a large West Chelsea site that previously belonged to U-Haul.