Lender Files to Foreclose on Shuttered Wagner Hotel
By Celia Young November 4, 2022 5:49 pmreprints
Troubles are mounting for the owners of The Wagner, a shuttered hotel in Battery Park City.
The property’s lender, a limited liability company tied to Silver Creek Development, sued hotel owner Howard Wu, his business partner Taylor Woods and firms tied to their company, Urban Commons, for allegedly defaulting on a $96 million loan that Westbrook Partners originally provided on The Wagner in 2018, according to a lawsuit filed in New York County Supreme Court on Thursday.
Silver Creek claimed the duo and Urban Commons defaulted on the loan in 2020 and wants to force a sale of the hotel to get its money back before Wu and Woods pay off any of their other debts.
Silver Creek and Urban Commons did not immediately respond to requests for comment. Urban Commons’ attorney, Derek Wolman, declined to comment. The suit was first reported by Crain’s New York Business.
Urban Commons bought the 298-room hotel at 2 West Street for $147 million in October 2018 from Millennium Partners and Westbrook, with Westbrook originally lending the $96 million to partially fund the purchase, though it no longer owns the debt, according to a spokesperson for the firm.
The Wagner operated under the Ritz-Carlton brand until 2017 when its previous owners secured Highgate Hotels as its new operator, much to the ire of the complex’s residents, who claimed they had been promised apartments above five-star accommodations.
But Wu and Woods had grand plans of converting the hotel, housed on the lowest 12 stories of the 38-floor Millenium Point Condominium, into a luxury hospitality destination and make a pretty penny, according to a separate lawsuit the company filed in New York County Supreme Court in May.
Their plans went off the rails after the pandemic hit and they were forced to close the hotel in April 2020. While New York City’s hospitality industry has somewhat recovered, The Wagner has not. A phone call Friday to The Wagner went directly to a voicemail saying that The Wagner was “temporarily closed.” A phone call to an alternate number was not returned.
Urban Commons’ loan came due seven months after the closure, and the company failed to pay it off, Silver Creek claimed in court documents. The lender argued it should be paid before Urban Commons refunds its other creditors, which include a building maintenance company, consultancy and elevator engineer.
Urban Commons, however, has blamed the Battery Park City Authority (BPCA) for its financial troubles.
The Wagner sits on land owned by the BCPA. In a May lawsuit, Urban Commons claimed the BCPA delayed the process of securing a new hotel operator after Highgate decided to leave the building in August 2020.
As a result, Urban Commons has been “bleeding millions in cash a year” to hold on to the property, the company claimed in its lawsuit.
The BPCA declined to comment.
Meanwhile, Highgate argued in California bankruptcy court that Urban Commons had failed to honor a contract requiring it to cover Highgate’s operating expenses at The Wagner. Separately, Wu, Woods and Urban Commons were also sued for allegedly defrauding an investor and keeping its $1 million meant to buy 18 distressed hotels after the deal fell apart, The Real Deal reported.
Urban Commons was accused of pocketing $2.4 million from a COVID-19 relief loan meant to pay its employees at the Queen Mary ship in Long Beach, Calif., the Los Angeles Times reported.
Celia Young can be reached at email@example.com.