After signing a deal to let homeless people stay at the MAve Hotel, Salim “Solly” Assa says he has been stuck with the bill for the damage they allegedly caused.
The NoMad establishment, which is owned by Assa Properties, is suing insurer Lloyds of London for more than $1 million. The insurer declined to cover the cost of damage that Assa says occurred while the hotel was housing homeless families, according to a federal lawsuit filed Tuesday.
In February 2020, the hotel, at 62 Madison Avenue, subscribed to an insurance policy that covered from Jan. 29, 2020, through Jan. 29, 2021, according to the complaint, filed in the Southern District of New York.
Years earlier, on Oct. 24, 2017, the hotel entered into an agreement with nonprofit Acacia Housing Network for the nonprofit to lodge unhoused families in the hotel’s 74 rooms. The agreement was to last through Oct. 30, 2020, when families were to leave.
After the departure of Acacia and its clients, the hotel noticed substantial damage to the property, including punctures in walls and ceilings, vandalized and defaced furniture, slashed fabric headboard covers and carpeting and defaced wall hangings, according to its lawsuit.
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In January of this year, the MAve Hotel submitted a claim for coverage of the damage. However, the insurer found that the damage was “normally expected wear and tear over a three-year period and not from the reported vandalism,” the complaint states.
The MAve and its owner have had a turbulent couple of decades.
Madison Hotel Owners, an entity controlled by Livorno Properties principal Ben Zion Suky and Roxy Deli owner Joseph Ben Moha, bought the property in 2008 for $32 million, renovated it for $7 million the next year, and lost it in 2011 following a foreclosure suit.
In October 2016, the New York Post reported that the hotel was serving as a shelter through an agreement with the city even as the city was suing Assa Properties for turning four Midtown apartment buildings into illegal hotels.
In 2019, the owner sued what it called a group of soothsayers, fortune tellers and psychic readers for allegedly skipping out on $870,000 in rent at the MAve. “It was a scheme Assa Properties didn’t see coming,” The Real Deal wrote.
This year, a $19.5 million loan on the hotel property was sent to a special servicer, according to Trepp. When TRD reported the news in April, the loan was more than 90 days past due.
Assa Properties declined to comment. Lloyds of London did not respond to a request for comment.