Owners of NoMad Hotel failed to pay $100M to lenders and investors

Sydell, Make it Nice are being sued in state and federal court and face foreclosure proceedings

TRD New York /
Apr.April 19, 2019 09:00 AM
Andrew Zobler of Sydell Group and the NoMad Hotel at 1170 Broadway (Credit: Google Maps and Kaplan Heckler)

Andrew Zobler of Sydell Group and the NoMad Hotel at 1170 Broadway (Credit: Google Maps and Kaplan Heckler)

It seemed like the hotel project that couldn’t fail.

But new documents filed as part of a state and federal lawsuits show that the owners of the NoMad hotel at 1170 Broadway neglected to repay more than $100 million owed to lenders and equity investors starting in late 2018, Commercial Observer reported.

Andrew Zobler’s Sydell Group and Make It Nice own the hotel through a ground lease with the Haddad Organization, which is suing the partners in state court.

NoMad hotel at 1170 Broadway

NoMad hotel at 1170 Broadway

While the hotel appeared to be financially sound — with gross revenue climbing $2.5 million per year on average from 2015 to 2018, according to CO — court filings show the hotel owners didn’t pay back Colony Capital and Bank of America $140 million in debt that came due in December. Now Colony, which provided a $35 million mezzanine piece, has initiated a UCC foreclosure auction which is set to take place in June.

Haddad’s suit alleges Sydell and Make it Nice failed to resolve building-code violations, including defective facade work. But the partners’ counsel argues that it’s a ploy to gain leverage on a ground lease that was negotiated in a different market.

“It is abundantly clear that the landlord is unhappy with the economic deal reached more than 11 years ago,” Howard Shapiro, a lawyer for the NoMad’s owners, wrote in court documents, “and through this default notice is attempting to extort concessions from the tenant parties to improve that deal.”

The owners are also being sued in federal court by energy giant Chevron, who bought equity in the hotel in 2009. Chevron say part of the agreement allowed them to sell back its ownership share to guarantors GFI Capital and Square Mile Capital Management, but that when they tried to do this in November 2018, the guarantors reneged.

The 168-key luxury hotel, which opened in 2012, was developed by GFI Development, then a partnership between Allen Gross and Zobler, who had also partnered on the Ace Hotel at 20 West 29th Street. Following a legal dispute between the partners, GFI sold its interest in the NoMad Hotel. [CO] — Decca Muldowney

Related Articles

With a cooling trade war, stocks perform well, including real estate. (Credit: iStock)

Real estate stocks push up this week as U.S.-China trade tensions ease

416 West 25th Street and Maverick Real Estate Partners principal David Aviram (Credit: Google Maps and LinkedIn)

Chelsea landlord claims “predatory” lender is charging a crippling interest rate as punishment after losing foreclosure case

Sam Chang and 40 West 45th Street (Credit: Google Maps)

Sam Chang hit with $2M suit over Club Quarters hotels

Arden Group CEO Craig Spencer, Hello Living CEO Eli Karp and 4650 Broadway (Credit: Google Maps, iStock)

Hello, lawsuit: Spurned Inwood dev site buyer Hello Living sues ex-partner

Brookfield's Rick Clark and RFR Realty's Aby Rosen with the Lever House at 390 Park Avenue (Credit: Getty Images and Google Maps)

Aby Rosen makes it two Lever House lawsuits in two weeks

475 Park Avenue South (Credit: Google Maps)

Cohen Brothers Realty sues storied landlord to stay in Park Ave South building

181 Varick Street (Credit: Google Maps)

Claremont Companies buys Soho Marriott for $59M

4650 Broadway (Credit: Google Maps)

Inwood site goes for twice what seller paid last year