Urban Commons sues to protect $147M hotel lease in FiDi

Los Angeles-based investment firm Urban Commons filed a suit yesterday 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, is allegedly near terminating the ground lease. The lease termination date is allegedly today, May 27.

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.

The hotel was previously branded a Ritz-Carlton, and the residential units of the condominium sued Westbrook over the change from a Ritz-Carlton to the Wagner.

Urban Commons alleges it has lost $75 million because the state has refused to consent to changes in hotel branding. Urban Commons and its owners have faced litigation on various fronts. The real estate investment trust that is affiliated with Urban Commons, Eagle Hospitality Real Estate Investment Trust, filed for bankruptcy protection earlier this year, and Wu filed for personal bankruptcy in late 2021 as well. And several months ago, Highgate Hotels, the former manager of the Wagner, filed a $23 million claim, alleging it was not paid enough to cover its operating expenses, The Real Deal reported in April.

In addition, a bankruptcy judge in Delaware last year accused Woods and Wu of improperly using federal PPP funds.

Court LINK

Direct link to Acris document. link