Alex Sapir’s Sapir Corp is the latest New York City hotel owner set to land a Paycheck Protection Program loan. And in completely unrelated news, his former brother-in-law and business partner Rotem Rosen has decided to give his PPP money back.
Sapir applied for the $2.9 million loan in mid-April for the NoMo Soho hotel at 9 Crosby Street and was notified of Small Business Association approval by the lender processing it, the company disclosed in its annual earnings report on the Tel Aviv Stock Exchange.
Four hours after the publication of Sapir’s earnings, Rosen’s MRR Development published a disclosure regarding the $1.7 million PPP loan it received for the Hotel Indigo Lower East Side a few weeks ago.
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“In light of the publication of new clarifications by the federal government in connection with the program … the company has decided, solely for the sake of caution, to return the loan funds in full before May 7,” the disclosure reads.
On April 23, the SBA published guidance on the question of whether “businesses owned by large companies with adequate sources of liquidity” qualify for PPP loans, which are partially forgivable. The guidance notes that borrowers are required to certify that “current economic uncertainty makes this loan request necessary to support ongoing operations,” and that large public companies are unlikely to be able to do so “in good faith.”
A tiny fraction of the first $349 billion batch of PPP funds went to large public companies, but that fraction amounted to hundreds of millions of dollars, leading to much controversy. The largest such recipient of PPP funds was Dallas-based hotelier Monty Bennett, whose Ashford Hospitality Trust received $46 million in coronavirus relief while paying out $2 million in dividends to Bennett and his father.
Amid the public backlash, firms including Shake Shack, Legacy Housing Corp and the Los Angeles Lakers gave back their PPP money. The federal government moved to add another $310 billion to the program after the first allocation was quickly exhausted.
A spokesperson for Sapir said the firm is not “looking to make headlines” during the crisis.
“We are focused on getting our employees back to work safely through funding from this loan, working with our lenders and operator in finding creative solutions for the [NoMo Soho hotel] and seeing where we can do our part supporting healthcare workers and others in need during this extremely difficult and sad time.”
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Rosen declined to comment.
Unlike many New York City hotels, the NoMo and the Indigo have remained open during the citywide shutdown. The NoMo is now offering rooms as “private day-use suites that make the perfect office environment,” according to its website.
Hotel occupancy in New York City has risen from below 20 percent earlier this month to 41 percent, according to the latest data from hospitality research firm STR. Much of that increase is attributed to healthcare workers, patients, and the homeless filling rooms, as well as to many hotels shutting down, which removes them from the occupancy calculation.