There is a dispute surrounding the auction process of Margaritaville Times Square, with the owner claiming that the lender rigged the process. The New York City branch of the Jimmy Buffet song-themed hotel and restaurant was set to be auctioned as part of a foreclosure sale but filed for bankruptcy prior to the auction. The owner, Sharif El-Gamal, failed to pay off a $57 million loan on the property, leading to the lender, Craig Spencer’s Arden Group, initiating foreclosure proceedings. However, El-Gamal argues that the auction terms and bidding instructions were not provided in a timely manner, among other reasons, making the auction “commercially unreasonable” and therefore should be invalidated.
El-Gamal’s lawsuit alleges that Arden Group intends to gain control of the property and benefit from his hard work. The lawsuit also claims that prospective bidders are being required to sign nondisclosure agreements, preventing them from communicating with El-Gamal, and that the deposit terms are unclear if the sale is postponed. This legal dispute adds to the challenges faced by Margaritaville Times Square, which received mixed reviews upon its opening in 2021.
In addition to the auction controversy, the property has faced other legal conflicts. A synagogue that previously occupied the building accused El-Gamal of breaking a promise to include a kosher kitchen-equipped sanctuary in Margaritaville, leaving the synagogue “homeless.” The location of Margaritaville Times Square holds historical significance as it was previously the site of Parsons School of Design and appeared regularly on the show “Project Runway.”
Soho Properties and Arden Group did not provide immediate comments on the matter. Despite the bankruptcy filing, Margaritaville’s Chief Investment Officer, Evan Laskin, assured that the resort will remain open and operational, and looks forward to providing enjoyable experiences for guests and New Yorkers.
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