Developer Jubao Xie has secured the next chapter for the world’s tallest Holiday Inn.
A federal bankruptcy judge approved Xie’s plan to make the Financial District hotel at 99 Washington Street into housing for migrant families, Crain’s reported. The permission should allow Xie to move forward on a preliminary agreement with NYC Health + Hospitals, which leads the migrant shelter program.
Under terms of the agreement, Xie could reap $190 per room per day for hosting migrant families. If the 50-story, 492-room hotel hits peak occupancy, that could add up to more than $93,000 a day and up to $2.8 million per month.
When accounting for expenses, the agreement could help Xie recover about $10 million, according to his attorneys. The lease would run through at least next April.
Xie could use the money. The developer put his property into bankruptcy in November, saying he needed to renegotiate with its creditors. The owner’s missed payments total $10 million, but default interest adds another $16 million to the tab. His bankruptcy attorney said the loan’s servicer should show some flexibility due to the pandemic’s impact.
Court papers filed in connection to the bankruptcy listed assets of $177.6 million and liabilities of $143.3 million. Xie claimed he lent millions to the hotel to keep it going during the pandemic and needs bankruptcy protection to preserve his equity.
Xie developed the hotel in 2010 with Sam Chang before taking full control of the property in 2014. In 2018, Xie refinanced with a $137 million loan from Ladder Capital, since split into tranches held by CMBS bondholders and Triangle Capital Group.
In 2020, the hotel owner defaulted. In March, bondholders trustee Wilmington Trust filed to foreclose on the property.
The city has targeted hotels to house migrants amid a deepening crisis. Midtown’s Row NYC hotel was picked as one location to house migrants, big enough to house up to 600 families.
City Hall called on the real estate industry in December to help house asylum seekers. The Economic Development Corporation released a request for proposals for space to temporarily house migrants, asking developers to pitch space for “congregant-style housing,” such as industrial space.
— Holden Walter-Warner