Aby Rosen dodges liability at Gramercy Park Hotel

Solil Management sued to end RFR Realty’s lease

New York /
Oct.October 27, 2021 06:16 PM
Aby Rosen dodges liability at Gramercy Park Hotel

RFR Realty co-founder Aby Rosen and the Gramercy Park Hotel at 2 Lexington Ave, New York (Getty, Wikipedia)

If someone pays for RFR Realty’s default at the Gramercy Park Hotel, a judge says it won’t be Aby Rosen.

Landlord Solil Management owns the dirt under the iconic hotel. The company sued to evict RFR and collect almost $80 million owed under the lease terms in April. The firm had been leasing the land for about $5 million per year, but stopped making payments in November 2020 after the hotel closed amid the pandemic.

A state Supreme Court justice has now ruled the real estate investor isn’t personally liable for the ground lease at the hotel, Crain’s reported. The ruling said the limited liability corporations that own the hotel could still be liable, although that remains to be seen; Rosen is the principal of those LLCs.

Between RFR falling behind on payments and Solil suing to terminate the lease, JPMorgan Chase sold a $75 million debt in January secured by the hotel to RDAC 8 LLC.

The hotel owner was compelled in July to pay $5.5 million in back rent and property taxes from November 2020, Crain’s noted. The status of the $80 million Solil was seeking has not been decided.

Solil’s lawsuit also involved allegations that RFR tried to renegotiate the 72-year lease at the hotel, removed art and furniture from the building, failed to make rent and tax payments, allowed the hotel to deteriorate, and that Rosen allowed his mother to stay at the hotel free of charge. Rosen denied all of those allegations.

RFR signed the lease in October 2006 to operate the hotel through 2078, according to Solil. Four years later, Rosen bought out his partner — hotelier and developer Ian Schrager — and took full control of the hotel.

Rosen has a history when it comes to claims of default and overdue payments.

In 2017, Rosen faced foreclosure at Lever House at 390 Park Avenue as he struggled to refinance a $110 million loan. A partnership between Brookfield and Philip M. “Tod” Waterman III ultimately took control of the building.

More recently, Rosen in 2020 fell behind on payments for a $25 million CMBS loan for four commercial condo units at the base of the Core Club, which he purchased in 2016.

News

[Crain’s] — Holden Walter-Warner





    Related Articles

    arrow_forward_ios
    From left: Adam Weiner and John Fish (Getty, LinkedIn, Curry)
    Developer destroyed potential evidence in battle over $800M project
    Developer destroyed potential evidence in battle over $800M project
    Fromk left: Mauricio Umansky, Christian Ulbrich, and Scott Rechler
    They said what now? Real estate quotes of the week
    They said what now? Real estate quotes of the week
    RXR's Scott Rechler, Tamir Shemesh, Richard Meruelo, and Maria Meruelo (Getty, Serhant, Coldwell Banker)
    Breakups, layoffs and walkaways: No love in real estate last week
    Breakups, layoffs and walkaways: No love in real estate last week
    Multifamily player Tides Equities faces $6.5B dilemma in the Sun Belt
    Multifamily player Tides Equities faces $6.5B dilemma in the Sun Belt
    Multifamily player Tides Equities faces $6.5B dilemma in the Sun Belt
    Governor Kathy Hochul, casino chips, film camera
    How Hochul’s film tax credit, casino plan affect real estate
    How Hochul’s film tax credit, casino plan affect real estate
    Gov. Kathy Hochul
    Hochul pitches conversion tax break. Will developers bite?
    Hochul pitches conversion tax break. Will developers bite?
    A photo illustration of Mohegan Sun's Ray Pineault and Soloviev Group's Stefan Soloviev (Getty, Soloviev Group, Mohegan Gaming & Entertainment)
    Soloviev partners with Mohegan on casino bid
    Soloviev partners with Mohegan on casino bid
    Seth Weissman, John Catsimatidis, Mayor Eric Adams
    They said what now? Real estate quotes of the week
    They said what now? Real estate quotes of the week
    arrow_forward_ios

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

    Loading...