The Gregory Hotel in the Garment District (Google Maps, illustration by The Real Deal with Getty)
New York hotels have had a difficult two years, but few have suffered as badly as Gregory’s.
The Garment District Hotel’s troubles began around the start of the pandemic in early 2020, when owner Meadow Partners defaulted on a senior loan. That same year, hotel employees were deprived of their salaries, prompting the union to intervene.
The following year there was no good news. His top lender, AllianceBernstein, began a foreclosure on the property in April. Ultimately, the hotel at 42 West 35th Street was foreclosed and he was sold for $32.8 million. That’s about $17 million less than what Meadow Partners paid him in 2014.
An entity associated with the hotel’s mezzanine lender affiliate later sued Meadow, alleging that the hotel’s owner failed to repay a $15 million loan. The matter appears to have been resolved as the lawsuit was dropped.
But now the hotel is at the center of another lawsuit.
The eatery claims the owner evicted before the lease expired, stealing 150 bottles of wine and 60 bottles of liquor in the process to salt the wounds.
The restaurant has been a tenant of the hotel since 2002 when it was a Comfort Inn. The eatery claims it was not informed by Meadow Partners or its former operator, Highgate Hotels, that its lease had expired.
The lawsuit alleges that in February, three people used electric saws to remove a padlock at a street entrance. Then, in March, three people, including Pepa, were seen walking outside with cases of the restaurant’s wine and liqueurs.
According to the complaint, two restaurant principals were accompanied by NYPD detectives to discover that the delivery door in the basement had been broken.
The restaurant owner remains locked out of the property, claiming harassment and illegal eviction.
The Commercial Observer first reported on the lawsuit. The property owner has not yet submitted a response.
Lawyers representing Pepa Holdings and the restaurant did not respond to requests for comment. Pepa declined to comment.