The Chetrit family is facing potential foreclosure and allegations of mismanagement at a Williamsburg hotel and rental building.
The lender has requested a receiver for the building, claiming that the borrower didn’t get permission for a major lease, failed to pay vendors, missed the maturity deadline and is not maintaining the building. Tenants at the property have previously accused the Chetrits of overcharging on rent, constituting another event of default.
The property at the center of the claims is 500 Metropolitan Avenue in Brooklyn, the site of the Hotel Indigo Williamsburg. In total, the Chetrits took out $133 million against the property and now owe an alleged $157 million.
The suit, filed Friday, alleges several events of default. One involves a 2022 class action case from residential tenants in the building, who have accused the Chetrits of overcharging them on rent for years. The Chetrits registered inflated rents with the city, tenants claim, by charging a higher nominal rent and then offering generous concessions throughout the lease term.
Tenants in the building’s rent-stabilized apartments also accused the Chetrits earlier this year of virtually abandoning the building. In a petition, tenants said the owner cut off essential services, maintained dangerous conditions, harassed renters and evicted them in retaliation
Last year, the borrower agreed to lease space to the gym brand TMPL. But it allegedly didn’t get the required permission from the lender.
The borrower has also failed to put revenue from the hotel into the operating account, failed to pay vendors, and defaulted on its franchise agreement with the hotel brand IHG, the lender claims.
Meyer Chetrit was named as a defendant because he guaranteed the loan, and is being accused by the lender of failing to maintain liquidity of $25 million, failing to provide financial statements and distributing cash to the individuals behind the borrowing entity.
A representative for the Chetrit family declined to comment. An attorney for the lender could not immediately be reached for comment.
The 14-story building was developed by the Chetrits and contains 187 hotel rooms and 42 residential units. It opened in 2018.
Elsewhere in the city, the Chetrit family is similarly in hot water. In a foreclosure suit over the leasehold at a Seventh Avenue office building, the lender has accused Meyer Chetrit, along with Joseph Moinian and Edward Minskoff, of not collecting rent from the Chetrit Group and diverting funds to accounts inaccessible to the lender.
The failure to collect back rent from the family development firm “instills trepidations of intentional self-dealing, diversion and misappropriation of cash flow or, at minimum, severe negligence or mismanagement by Borrower in its capacity as sublessor in connection with the Mortgaged Property,” the lender wrote in its complaint.
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