Orchard/Allen Street Hotel Site Sold at Auction For $30.75 Million
An auction was held today for the long-stalled hotel site at 139-141 Orchard St./139 Allen St. Fortuna Realty and Elk Investors partnered for a successful $30.75 million bid, according to the Real Deal. The sale will require the approval of the U.S. Bankruptcy Court. A hearing is expected next week.
Ben Zhavian of the DAB Group and his creditor, Maverick Real Estate Partners, were locked in a long legal battle over the site. Then Zhavian’s company filed for Chapter 11 bankruptcy. In February of 2015, Arcade Capital agreed to purchase the property. But as previously reported, the deal fell through and the bankruptcy court judge ordered the parties to put the building back on the market.
Last September, attorneys representing both the owner and creditor went before Community Board 3 to request an extension to complete the building. The 16-story project does not conform to current zoning. The board opposed the move, its members saying they’d run out of patience with the delays. But the Board of Standards and Appeals approved the extension anyway, giving the new developers four more years.
Morris Moinian’s Fortuna Realty is a significant player in New York real estate. It has developed many hotel projects, including Hotel Hugo in Chelsea, the Wyndham Chelsea, the Indigo Chelsea and the Dylan Hotel.