Grossinger's Sold Again
Developer plans golf resort, spa
February 5, 1999
NEW YORK--A partnership between a prominent Westchester County developer and a real estate investment company made the winning bid for Grossinger's resort hotel and golf course in U.S. Bankruptcy Court Thursday. The price was $6 million.
Winning bidder, Grossinger Associates, is a company formed two weeks ago by Louis Cappelli and members of the Rechler family, who are principals in Reckson Associates, also based in Westchester County.
"This is real good news for the county," said Sullivan County Attorney Ira Cohen, who expects the county to collect most of the resort's $800,000 tax debt from the proceeds.
He also expressed optimism that the new owners have the wherewithal to turn the property around.
"(Cappelli) plans to develop it into a five-star golf resort and spa," said his attorney Joseph S. Rosenthal. "He believes the area has a future."
Cappelli is building a large mall in New Rochelle, and he built the parking garage at Westchester Medical Center in Valhalla.
Rosenthal said the once glamorous hotel in Liberty will be restored, but definite plans have yet to be made. There was no word on when it might reopen.
Hospitality Worldwide Services made a back-up bid of $5.35 million, which will be accepted if the Cappelli deal falls through.
A non-refundable deposit of 20 percent, or $1.2 million, must be made by today, and the closing must take place within 30 days, according to Judge Arthur J. Gonzalez' ruling Thursday.
Other bidders included David Flaum, a Rochester developer, and Morgan Capital, an investment firm.
The $6 million purchase price bought a resort with a colorful past.
Around 1919, Malke and Selig Grossinger turned a farm in Liberty into a boardinghouse. Their daughter Jennie and her husband, Harry Grossinger, a cousin with the same last name, made Grossinger's a famous resort. By the time the U.S. entered World War II, a bomber was named after the resort, and boxing champ Rocky Marciano, who trained there, had Grossinger's emblazoned across the back of his robe.
A young Eddie Fisher and Debbie Reynolds launched their careers on Grossinger's stage and were married at the resort.
When vacation habits changed in the 1970s, Grossinger's, like other Catskill resorts began to struggle.
The family sold the resort in 1986 for $9 million to a group of investors also called Grossinger Associates. They were unable to make good on renovation plans and filed for bankruptcy protection.
Members of the Min family bought the property in 1993 for $5 million and remodeled 40 of the resort's 600 rooms. While keeping the acclaimed golf course open, they were unable to resurrect the hotel business.
Korea Exchange Bank foreclosed on mortgage loans to the Min's Grossinger Resort Corp. in April 1998, and Hospitality Worldwide Services soon bought out the bank's interest--a $1.74 million first mortgage and an $806,700 third mortgage--for an undisclosed sum.
HWS attempted to take the property over last spring but was thwarted by the Min's filing for Chapter 11 bankruptcy protection. HWS's bid Thursday matched amount it says it has invested in the resort. HWS is among the secured creditors who expect to recover all or most of their investments in the resort.