Manhattan hotel at center of 1MDB fraud case lands $615M refinancing

Loan comes from Deutsche Bank and JPMorgan

TRD New York /
Jun.June 05, 2019 06:34 PM
Witkoff Group's Steve Witkoff and the Park Lane Hotel

Witkoff Group’s Steve Witkoff and the Park Lane Hotel

Deutsche Bank and JPMorgan have loaned the Witkoff Group and his investment group $615 million to refinance the Park Lane Hotel, a Manhattan icon that’s linked to one of the biggest global fraud cases in history.

The loan includes a small amount of new financing and replaces Wells Fargo as the agent, according to property records.

Representatives for the Witkoff Group could not immediately be reached for comment. Dustin Stolly and Jordan Roeschlaub at Newmark Knight Frank secured the debt. The brokers declined to comment.

The famed 631-room hotel at 36 Central Park South was developed in 1967 by billionaire Harry Helmsley. A Helmsley family trust owned it until 2013, when Witkoff and entities affiliated with fugitive Malaysian financier Low Taek Jho (also known as Jho Low) bought it for roughly $654 million, with plans for an ostentatious condo conversion.

Low is now at the center of Malaysia’s $4.5 billion 1MDB scandal, and the hotel has been embroiled in legal troubles since 2016, when the U.S. government made moves to seize it.

Abu Dhabi sovereign wealth fund Mubadala Investment Co. paid Low $135 million in 2013 for a portion of his 85 percent stake in the property and recently upped its investment in it as part of the U.S. government’s attempt to recover money tied to the scandal. Witkoff and his investment group, which includes Harry Macklowe and Howard Lorber, own 15 percent of the property, according to court documents. They haven’t been charged or accused of wrongdoing.

In November, Brooklyn prosecutors charged Low — who is believed to be in China —with conspiring with a Goldman Sachs banker to launder billions of dollars embezzled from 1MDB. He’s facing a litany of fraud charges in multiple nations.

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