Urban Commons puts $147M hotel leasehold in bankruptcy following state court loss

2-10 West Street (Credit - Google)

Los Angeles-based Urban Commons, led by Taylor Woods and Howard Wu, filed five bankruptcy actions related to its $147 million leasehold of the Wagner Hotel at 2 West Street in Battery Park City. The main filing is Urban Commons 2 West LLC, with Taylor Woods signing the petitions.

The Chapter 11 actions come about a month and a half after Urban Commons lost in state court in an attempt to obtain a Yellowstone injunction to halt the effort by Battery Park City Authority, as landlord, to terminate Urban Commons’ ground lease. The judge in that action, Supreme Court Justice Andrea Masley, wrote in part in her ruling denying the Yellowstone injunction, that Urban Commons would not be able to fully pay arrears on the ground lease. [Ground lease case LINK]
“Tenant [Urban Commons] fails to establish an ability to cure. Tenant is a limited liability company whose only asset, according to Landlord, is the lease, which Tenant does not dispute. According to Tenant, the lease is worthless. (NYSCEF 4, Woods1 aff, ¶ 26.) Tenant also fails to provide any financial documentation to establish that it has funds available.”
However, Urban Commons immediately filed an appeal which remains before the Appellate Division, with all the documents sealed.

Urban Commons, led by Taylor Woods and Howard Wu, bought the 298-key hotel from Millennium Partners and Westbrook Partners for $147.3 million in 2018, through the acquisition of a ground lease covering the hotel unit of a condominium structure that includes a residential building.

In May, Urban Commons filed the ground lease case in state court seeking to protect its leasehold control over the shuttered Wagner Hotel in the Financial District. The Battery Park City Authority, which is the landlord to Urban Commons, was allegedly near terminating the ground lease. The lease termination date was set for May 27, 2022.

The bankruptcy petitions state assets of and liabilities between $100 million and $500 million.

Bloomberg Law reported on the filing late yesterday.

Bankruptcy petition LINK

Direct link to Acris document. link

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