Like the giant squid and the sperm whale, or perhaps more like the crocodile and the python, two redoubtable real estate reptiles are locked in a primordial death struggle that will decide the fate of the Chelsea Hotel. Soon, one combatant will sink, lifeless, to the bottom of the putrefying construction-pit sludge, while the other limps off to lick its (perhaps also soon-to-be fatal) wounds.
The two sides, represented by Chelsea Hotel iron lady Marlene Krauss and potential buyer Joseph Chetrit, have been negotiating the sale of the hotel for months. By law, if they don’t close by July 31, the deal is voided. Though we have no way of seeing into the inner workings of the negotiation process, among the possible reasons it’s taking so long are:
1. Bernie Madoff Ponzi scheme victim Krauss doesn’t have the agreement of the full Chelsea Hotel shareholders’ board;
2. the recently embattled (and presumably cash poor) Chetrit is still trying to attract investors who will loan him the money—reportedly “over 80 million” —needed to buy the hotel.
Both seem to have lately been waging an intense PR campaign: plumber’s daughter Krauss shrilly trumpeting the sale of the hotel in the press, hoping to present it to the board as a fait accompli that they dare not oppose; while Chetrit, who has recently split with his brothers/partners and had several high-profile properties foreclosed on, runs around loudly proclaiming that he’s rich, rich, RICH!!!—even whipping out his checkbook on one occasion to prove that he could easily dash off a check for $100 million .
Excuse me, Joe, but can’t you just write whatever numbers you want to in those things?
Though Krauss and Chetrit seem to be on the same page in their willingness to conclude the deal, in doing his due diligence, Chetrit—whose corpulent bulk was spotted in the lobby last week, sweating profusely despite the AC—has most likely begun to have second thoughts about this property, and to see its numerous downsides -- too numerous to list here!.
In short, though he desperately needs to make this buy so he can look like a player again, we are beginning to think that Chetrit wishes he had his reported $15 million down payment back. Though this is admittedly speculation, we think the competition has boiled down to a battle of wills between TMS Magnate Krauss, who wants to push the sale through at all costs, and Morrocan Mogul Chetrit, who would probably like nothing better than to back out of this deal without losing face—or, more importantly, his shirt! Oh well, he’s gotta like the donut shop, at least. -- Ed Hamilton