The world’s tallest Holiday Inn has won a judge’s approval to become a shelter for immigrants in midtown Manhattan – clearing the way for a deal with the city that would allow the hotel owner per Room costs $190.
Earlier this month, the 50-story, 492-room Holiday Inn Manhattan’s Financial District — which filed for bankruptcy in November after being hit by the pandemic — struck a deal with New York City Health and Hospitals. Signed on, the agency accused the Big Apple of housing. The immigrant population ballooned, according to court documents.
The nightly room rate the city will pay — which, with the hotel at full capacity, equates to a daily tab of $93,500 and a monthly tab of $2.8 million — is at the high end of a range the city has estimated between $115 and $190. A migrant hotel housing program now reportedly spans dozens of hotels across the city, according to hotel consultant Jeffrey Mills.
That’s even higher than the hotel’s average daily room rate of $102, with an occupancy rate of 60% in January, according to court filings. On Tuesday, the hotel’s website was advertising rooms for $145 to $149 a night.
A federal bankruptcy judge in Manhattan on Monday approved a plan presented by the hotel’s owner, Chinese developer Jubao Xi. The hotel estimates it will earn $10.5 million by the end of the deal on May 1, 2024, which will help pay off its debts, including $11 million in interest on its loans.
Under the agreement, the city will provide 24-hour security and “be responsible for removing guests who may be unruly or otherwise cause a danger or nuisance to other guests, employees and contractors,” according to court papers. are”. The hotel will provide housekeeping services at least three times a week.
The filings offer a rare glimpse into the partnerships the city is building with about 70 local hotels, including The Row, The Watson, The Stewart, The Paramount and Knight hotels, that have temporarily housed immigrants. Agreed.
“It lifts the veil on these agreements, which are otherwise not public,” said distressed debt expert Adam Stein-Saper.
Under the agreement, the hotel’s franchisor, IHG Hotels & Resorts, requires that it not be advertised as a Holiday Inn during the term of the agreement and that “external branded signage be covered and otherwise make it clear to the public that Hotel not available. Public use,” according to court documents.
If an immigrant stays at the hotel after the deal, the city would be obligated to pay the hotel $750 per room per day, according to the filing.
Mayor Eric Adams said this month that the costs of housing and caring for refugees coming across the Mexican border, particularly from Central America, have already exceeded city estimates and are expected to reach $2 billion or so. The city is double the forecast. About 40,000 immigrants have arrived since last year, the city said this month.
Under the agreement, microwaves will be removed from rooms, with some moved to common areas to prevent safety risks posed by migrants using hot plates in their rooms — a problem Joe was born at the Row NYC Hotel in Times Square, as exclusively reported by The Post. The city will also provide all the food but can use the hotel’s restaurants and employees to prepare the food, according to the filing.
The dispute between the Holiday Inn and its lender, Wilmington Trust National Association, came to a head last week when the bank asked a judge to block the project, objecting to, among other things, terms of the agreement that the city This allows determining whether to repair “extra wear and tear” in the hotel.
“Operating the hotel as refugee accommodation is inconsistent with the hotel’s brand, how it is marketed or how it may be marketed after the proposed contract is terminated,” the lender said. said in a Jan. 24 filing.
The property owners responded in a Jan. 17 filing that the bank’s claims were “outrageous,” and alleged that the lender’s “ultimate goal is to get rid of [hotel’s] Concessional Loans.”
The hotel, which first opened in 2014, defaulted on its $137 million mortgage in 2020 as the pandemic began. The hotel loan has a rate of 5.25%, which equates to about $612,000 in monthly interest payments.
“The hotel has to perform very well to maintain its current debt,” Steinspeer said. Ironically, “if the hotel is doing well, that’s not good for the lender, who doesn’t want to be stuck with below-market loans on their books,” added Stan Saper.
A lawyer for the Wilmington trust did not respond to requests for comment.
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