The saga of the Margaritaville Times Square hotel took another turn this week.
According to the real estate news website The Real Deal, Sharif El-Gamal, the developer behind the Times Square Margaritaville Resort, asked a judge to call off the foreclosure auction on the hotel, which is scheduled for July 10.
In a lawsuit filed this week, El-Gamal claimed that Arden Group, the lender behind the mezzanine loan on the hotel, rigged the auction process in order to scare off any potential buyers because it wants to seize the property itself.
Among other things, the lawsuit claims that the Arden group is not giving bidders enough time to evaluate the hotel, which will go up for sale just 13 business days from June 23 when the terms of the sale and bidding instructions were revealed.
The lawsuit also claims that the auction house is having bidders sign NDAs that would prevent them from communicating with El-Gamal, which it says is a “typical and customary” process.
The hotel opened in 2021, debuting with 234 guestrooms, five bars and restaurants, and an outdoor pool in the heart of Times Square at 560 Seventh Ave. Its debut was part of a quasi-renaissance for the New York City hotel scene post-COVID, opening at the same time as the new Marriott EDITION Madison Park, Aman New York, and more.
In March, its future was put very much in the air when it was revealed that El-Gamal’s Soho Group defaulted on its mezzanine loan on the hotel.