Wells Fargo has sued to sell the Standard High Line Hotel in Manhattan, claiming the Hong Kong-based owner has failed to make any payments in over a year on a $170 loan.
In a complaint filed to the Manhattan federal court in early November, Well Fargo said Gaw Capital Partners Chairman Goodwin Gaw owes more than $186 million in principal, interest and fees on the 338-room hotel and asks that it be foreclosed on to recoup the bank's investments.
Gaw, who purchased the hotel in 2017 for $340 million, lashed out against the lawsuit and said he would 'vigorously defend' the 18-story Chelsea hotel against foreclosure, Bloomberg reported.
The hotel recently played host to a Studio 54-themed Halloween Party for stars like Lorde and Ava Max and was where Solanges Knowles was recorded attacking brother-in-law Jay-Z inside an elevator in 2014.
Wells Fargo sued to sell the Standard High Line Hotel, an 18-story, 338-room hotel, in NYC
Goodwin Gaw, chairman of Gaw Capital Partners, said he would 'vigorously defend' the hotel against foreclosure and blamed other loaners for his failure to make payments
Gaw Capital has blamed Apollo Global Management Inc., which can take control of the hotel in case of default, for spurring settlement offers and payments on the loan.
'Apollo Global Management and its affiliates, who own a small sliver - 18% - of the loan, have demonstrated that they are more interested in putting their financial greed above interests of all involved including the bondholders,' Gaw Capital spokesman Kai Speth said in a statement.
Well Fargo issued the lawsuit after Gaw failed to make payments on the $170 million loan
Apollo denied being the reason why Wells Fargo was seeking to foreclose on the property.
'Apollo is not a party to the foreclosure action, which was initiated by the special servicer,' a spokesperson said in an email responding to questions. 'The debtor in this case has failed to make payments under the loan and has been in default since May 2020.'
CWCaptial Asset management, the special servicer managing the hotel's mortgage, filed a formal notice of default in June 2020. A year later, the company told Gaw it was accelerating the debt collection process because of the unpaid balance and rising interest costs.
Like most hotels in New York City, the Standard High Line had been struggling after the pandemic forced it to shutdown.
The hotel later reopened, with occupancy at a meager 30 per cent in December 2020 before rising up to 76 per cent in June.
Rooms at the hotel can go for as much as $2,300 a night.
Like most hotels in New York City, the Standard High Line had been hit hard by the pandemic
Gaw Capital Partners owns investments in hotels all around the world, like the Hilton Del Mar, in California
But even as Gaw fell behind on payments for the NYC hotel, he continued to further invest his companies money in other projects, like a $437 million hotel in Singapore, Bloomberg reported.
Gaw Capital had about $3.25 billion under management in 2021, according to the company's website.
It owns investments in multiple hotels in the US and around the world, including the Hilton Del Mar, in California and the Soho House, in Chicago.
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