The 32-story Margaritaville hotel with the only outdoor pool in Times Square may see its last days this summer.
According to The Real Deal, a UCC foreclosure auction has been scheduled for the Maragritaville hotel on Monday, July 10th. The foreclosure follows developer Sharif El-Gamal’s failure to pay a mezzanine loan of $57 million this past March.
In May, the hotel was appraised and valued somewhere between $266-350 million.
Apparently El-Gamal claims that his lender, the Arden Group, sabotaged the auction to prevent potential buyers from purchasing the property. El-Gamal filed a lawsuit, stating that Arden’s process of foreclosure is “commercially unreasonable” and provides an inadequate amount of time to evaluate the property. This is because the auction notice was posted on April 10th, however, the terms of sale and bidding instructions weren’t entirely communicated until late June.
Furthermore, the lawsuit expands on Newmark, the brokerage handling the sale, requiring potential buyers to sign an NDA forbidding communication between the developer, where it’s “typically customary” to have the borrower take part in a process such as this.
Those interested in bidding on the property must be prepared to pay up a hefty $5 million deposit without a clear explanation of the status of their deposit if the auction is adjourned, reported The Real Deal.
When El-Gamal was unable to pay off the loan in March, he supposedly claimed he was in the process of getting a term sheet to refinance it and requested to postpone the auction until then.
The hotel opened in the summer of 2021, after originally being set to open in late 2020. The resort has a total of five restaurants and bars and more than 200 rooms.