The Dangers of Building on Quicksand (Allegria Land Bankrupt)

Breaking news for all the Allegria lovers and haters out there

And no, I’m not referring to this ridiculous video talking about the roof bar opening.

The company that owns the land under the hotel has filed for Chapter 11 bankruptcy protection.  I’m going to say this in upper case letters and bold to get the point across for all the rumor trolls.  THE ALLEGRIA IS NOT BANKRUPT OR IN FORECLOSURE.

What’s going on here is the Alrose Group, created a special entity called “Alrose King David” – which owns the land itself and they have filed for bankruptcy protection – a way to restructure debt and avoid foreclosure and all that other nasty stuff.

The hotel itself is owned by the Alrose Allegria LLC, and has not filed for anything, and is reportedly “on the upswing.”

You, like me may be asking “Hey, if these are both owned by Alrose, doesn’t that mean the one affects the other?”  I’d say the two cannot be separated, but I’m not going to get into the wonky financials here.  If you’re a whiz on these things, please feel free to comment.

The oompa-loompa-tinted Allen Rosenberg, president of Alrose Group is quoted by The Real Deal’s Adam Pincus as saying, “The bankruptcy filing “is against the real estate entity that owns the hotel; it has nothing to do with the hotel operations,”

The Real Deal article goes into some fun conjecture, heresy, and rumors about whether they are broke as a joke, or doing just fine, and I’ll let you read that over there.

Newsday’s James Berstein quotes Rosenberg as saying, “The [bankruptcy] filing is a necessary evil to get us through some restructuring. We hope to be out of bankruptcy as quickly as possible.” And went on to say that process could take from 90 days to two years.

Without a doubt this impending Chapter 11 filing was connected to the Allegria completely giving up on trying to get the abandoned lot next door.

So, finally, we have some concrete news one way or another about what’s going on at the controversial purple building.  I’ve got some emails out and will update if I have more info.  I’ll now step back and allow the comment war begin – I just ask that you keep it civil!

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3 thoughts on “The Dangers of Building on Quicksand (Allegria Land Bankrupt)”

  1. I had a buger for lunch there the other day. The burger was really good but the tomato was a little small. I sent it back and they were so nice. They put a really big piece of tomato on the burger. The fries were big and tasty. I ate them all. They never charged me for my water. I was pretty much impressed. I will most likely return for lunch again.

  2. Its typical to seperate real esatat assets from operating assets — even when they are controled by the same entity. The real estate company owns the land / building and leases the building to the hotel. This way its makes it easier to seperate the two if you ever want to sell one or the other, lease the hotel to a national operator, estae planning, etc. What is confusing though is though is the only operations of the real esate company (typically) is to collect rent and pay debt (taxes, utilities, upkeep, etc is typically paid for by the operating company). Thus not sure how they real esate company ends up in bankruptcy — assuming it is collecting the rent from the hotel.

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