Allegria to be sold at auction

The Allegria Hotel will be sold in a bankruptcy auction next month, after years of financial setbacks and two Chapter 11 filings.

Owned by Allen Rosenberg and operated by Alrose Allegria LLC, the posh 143-room, 124,000-square-foot oceanfront property at 80 W. Broadway opened in 2009 to great fanfare — the first hotel to open along the boardwalk in decades.

According to Maltz Auctions, the sale will take place on July 19 at 1 p.m. at the hotel, which “will be sold free and clear of all monetary liens,” and all prospective bidders must present $2 million bank checks.

Last year, Alrose Allegria filed for Chapter 11 protection in U.S.

Bankruptcy Court for the Southern District of New York. Court documents show that it has debts totaling $39.1 million, and the property is valued at $27.4 million.

Ken Silverman, a Chapter 11 operating trustee appointed by the court, said that all weddings and other events would take place as scheduled, and the hotel is accepting new event bookings and hotel reservations. It was booked over the Memorial Day weekend, he added.

“We’re operating, and doing well — we’re booking events, and the proposed sale is not going to interfere,” Silverman said. “We are sprucing up and fixing the hotel on a daily basis and we’re making the environment as user-friendly as possible, and we’ve been getting very good feedback.”

In April, Highgate Management took over operations at the hotel, and has “implemented and is continuing to introduce countless upgrades/modifications to enhance safety, efficiency and profitability,” Silverman said.

“It’s an extremely unique, attractive property, and many developers have contacted me with their unique vision about what should be done here, and everyone is extremely enthusiastic about the property,” he said, though he declined to speculate on how much a bidder might potentially offer for the property.

The Allegria’s financial woes were hardly a secret. Last year it filed for bankruptcy for the second time in four years, after the State Department of Taxation and Finance slapped the hotel with seizure notices on a third of its rooms because it owed $6 million in back taxes.

Rosenberg did not immediately respond to an email from the Herald.

“At some point … the federal government tried to convert the entire proceeding to a Chapter 7, which is a liquidation,” a person with knowledge of the bankruptcy told the Herald. “That’s not in the city’s best interest — everyone is out of work, the hotel is not operating and, as a centerpiece of the boardwalk, the city would like it to remain a hotel.”

Some officials said that the auction would allow the hotel to continue operations, and a new owner could turn it around. “It is in the city’s best interests to have a viable and successful hotel — it helps our local economy, makes Long Beach a destination and provides services for our residents,” City Manager Jack Schnirman said in a statement. “We continue to monitor the bankruptcy process very closely.”

The annual real estate taxes on the property — with exemptions — are $357,543, according to Maltz Auctions. A source said that the hotel had just recently caught up with what it owed the city in back taxes, but fell behind again.

Though no chain hotels have expressed interest in purchasing the Allegria, Silverman said, upscale, boutique hotel operators are eyeing it. Another person with knowledge of the potential sale said, “It’s my understanding that other boutique hotel operations will be bidding at auction.”