Midtown’s Martinique Hotel is up for sale months after its operators filed for bankruptcy in hopes of striking a deal with its landlord, its lender and its union-backed employees.
Herald Hotel Associates, the hotel operator, which holds a 99-year ground lease on the 330,000-square-foot building, is accepting offers for financing, broker Eric Anton said.
Alternatively, the hotel company is looking to sell the remaining 68 years on its ground lease at the property, located at 1260 Broadway, Anton said.
Seasons Affiliates owns the land beneath the hotel.
The property has received offers for both, but “it will take time to get any deal done, because we are in bankruptcy,” Anton said.
Management closed the 531-room hotel March 18 and furloughed many of its 176 employees, except essential workers, Brad Thurman, vice president of the operating company, said in court papers.
The hotel will remain closed at least until Sept. 1, according to its website.
Currently branded as a Hilton, the Martinique is one of the city’s oldest hotels. It was built in 1897 to be a luxury draw to attract wealthy clients, but by 1970, its rooms were being rented out by the city and the Red Cross to house the city’s homeless population.
It served as a welfare hotel for the next two decades before the last family was moved out and the building was renovated to become a Holiday Inn.
The hotel later became a Radisson, but that partnership was an underperforming one, and Herald Hotel opted to work with Hilton instead—which required more than $40 million in renovations.
Due to construction interruptions during the pandemic, nonessential work was delayed, but the revamp should be completed by the fall, Anton said.
Record-low occupancy rates made matters worse, reaching as low as 35% in August and creeping up to nearly 40% in recent weeks.
The operators still owe Chase bank $14.2 million on a $65 million mortgage, according to Thurman, but expect their $3.9 million federal Paycheck Protection Program loan to be forgiven.
He also blamed much of the hotel’s financial woes on the “onerous provisions of the [collective bargaining agreement] that represents those of the hotel’s union employees”—which are costing $3.5 million in severance pay.
Nearly 150 of the hotel’s 176 staff members are represented by the Hotel and Motel Trades Council.
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