Urban Commons in danger of losing FiDi hotel

UPDATED Nov. 7, 2022, 11:56 a.m.: Legal issues continue to mount for Los Angeles hospitality firm Urban Commons. It is now facing the loss of the hotel portion of The Wagner at the Battery in Lower Manhattan as a lender attempts to foreclose on the asset. The lender, an entity tied to Westbrook Partners, claims that Urban Commons defaulted on a $96 million loan that matured in December of 2020, according to documents filed in Manhattan. Westbrook, along with joint venture partner Millennium Partners, sold the property to Urban Commons in a $147.3 million deal in 2018. Westbrook then issued a loan for the hotel portion of the site, located at 2-10 West Street. The 36-story tower, which sits across from Battery Park City, is split between a hotel operated by Leading Hotels of the World, which covers the first 12 floors, and 120 condo units above them. The hotel closed in early 2020 and has yet to reopen. Calls to the hotel go to a recorded message that says it is “temporarily closed.” According to the lawsuit, Westbrook sent Urban Commons a notice of default in April 2021. The lender claims that Urban Commons has yet to cure the default. Urban Commons founder Taylor Woods responded Monday with a 150-word statement blaming Westbook for the Wagner’s problems. It began, “Urban Commons has no intention of ever giving up the property.” Woods said as soon as his company bought the property from Westbrook, which became the mortgage holder, Urban Commons was prevented “from executing a well-planned and comprehensive renovation, including a substantial conversion of the hotel from the independent and generic brand into a vibrant and stunning first-class luxury hotel.” The statement continued that Urban Commons “was thwarted every step of the way” and that Westbrook, which “overtly misled” Urban Commons from the start, “now seeks to further interfere.” Woods added a threat, vowing that his firm’s legal strategy will “ensure that all of the parties that bear legal and financial responsibility … will not be able to avoid bearing the full burden of damages and liability.” Those parties apparently include the Battery Park City Authority, which owns the land under the hotel and was sued by Urban Commons in May for allegedly delaying the replacement of Highgate Hotels as the hotel’s operator after it left in 2020. The latest lawsuit adds to a list of legal entanglements involving the property. In 2019, brokerage firms Luxury Property Group and Real Estate Wealth Advisors sued Westbrook and Millennium, alleging that they were not paid a commission for finding the buyer and remaining involved in the sale throughout the negotiations. This April, Highgate sued Urban Commons, claiming the latter only covered $19.2 million of Highgate’s $42 million in operating expenses. Highgate said it was unable to pay wages because of the shortfall. Urban Commons’ top executives are also facing lawsuits on different projects. Last November, a Delaware bankruptcy court judge held Howard Wu and Taylor Woods, who also operate a company called Eagle Hospitality Real Estate Investment Trust, in contempt for failing to account for the proceeds of a Paycheck Protection Program loan. The pair was also sued by an investor who claims he was defrauded out of $1 million. This article has been updated with comments from Urban Commons founder Taylor Woods.