Joe Moinian is making a last-minute attempt to stop an auction of his Midtown Hilton Garden Inn.
A Uniform Commercial Code auction was scheduled for Tuesday for the equity interest in 237 West 54th Street, the largest Hilton Garden Inn in North America, according to an emergency petition filed by Moinian to postpone the sale. Mezzanine lender Twin Summit LLC filed a U.C.C. foreclosure against Moinian and the entity that owns the 401-key hotel in April, according to court documents.
The Moinian Group founder claims the foreclosure documents filed by Twin Summit contain “misstatements, inaccuracies and inconsistencies” that could negatively impact the sale, according to the petition. That includes alleged misrepresentations about a pending judgment awarded in a lawsuit filed by a former guest who was injured at the hotel when a sliding door fell on her, per the petition.
A lawyer for the lender did not immediately respond to a request for comment.
The hotel’s $175 million mortgage landed in special servicing in February despite “strong operating metrics” and up-to-date loan payments, according to data from Morningstar Credit. The hotel’s appraised value dropped from $251 million to $206.6 million as of April, per Morningstar, noting that the pending lawsuit had impeded efforts to refinance the loan.
Moinian and Starwood Capital Group co-developed the 34-story, 142,300-square-foot hotel between Broadway and Eighth Avenue. The Gene Kaufman-designed property opened in January 2014. A year later, Starwood sold its 49.9 percent stake to Morad Ghadamian, a Lenox Hill-based investor and carpet importer.
Morgan Stanley originated the $175 million CMBS loan in 2015, property records show. It also provided a $25 million mezzanine loan, according to court documents filed with the petition. In 2022, Twin Summit took over the debt, which was guaranteed by Moinian and Ghadamian, according to court documents. The owners allegedly defaulted on the loan in March.
A U.C.C. allows a lender to foreclose on the shares or interests of the company controlling the real estate as opposed to the actual property. By acquiring shares of a company, the lender can bypass the lengthy judicial process.
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