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Valley Ridge Retreats LLC Buys Hudson Valley Resort & Spa For $7.5 Million; Flips Same Day To Developer for $12 Million
REAL ESTATE
Yosef Zablocki, through Valley Ridge Retreats LLC based in Ellenville, has purchased the iconic Borscht Belt Hotel (formerly the Granit) that he previously owned with Ephraim Vashovsky, a developer who had tried but failed to purchase the HNA Palisades Training Center on Route 9W in Orangetown several years ago. Valley Ridge Retreats LLC paid $7.5 million for the Hudson Valley Resort & Spa in Kerhonkson, and then flipped it for $12 million to a Kiryas Joel home developer, who a source close to the parties says is Akiva Klein. His entity is the Hudson Valley Resort Holding LLC.
Klein is the developer of Veyoel Moshe Gardens, a 1,600-unit condo complex on the edge of Kiryas Joel that is expected to house as many as 9,000 people on 70 acres.
Large iconic hotels like the Granit that have fallen into disrepair or have faded away in the Catskill Mountains in Ulster and Sullivan counties are targets for redevelopment. Somerset Partners LLC plans to raze The Nevele Resort in Ellenville off Route 209 and replace it with a modern hotel and luxury housing. YO1 Longevity & Health Resorts now stands on the former site of the Kutsher’s Hotel and Country Club in Monticello. Resorts World Catskills, a large hotel and casino, stands on the site of the former Concord Hotel. The former Fallsview in Ellenville is now Honor’s Haven.
It is unclear what the new owner plans to do with the former Granit Hotel, but for now, it will continue to function as a hotel, according to the buyer’s local counsel in Ellenville. The Granit was built in 1950 on more than 550 acres of land – and it was considered one of the last great Catskill resorts when the area was a draw for Jewish people escaping hot city summers. A recent call to Hudson Valley Resort & Spa indicates that the hotel is still operating and accepting room reservations but others say the business is barely operational.
The dispute between Zablocki and Vashovsky found its way to New York Supreme Court in Kings County (Brooklyn) when the partners in Hudson Valley NY Holdings LLC accused each other of cheating and misdirecting profits outside the partnership. The accusations included mismanagement, using the hotel property to benefit one partner over the other, closing out one partner from decision making, and constant arguing over the management and profits earned.
The Court found “the hotel is a losing venture requiring infusions of significant sums of money each month demonstrating the corporation is financially unfeasible.” It also found it was not reasonably practical for the parties to continue to operate the venture together, and ordered the LLC dissolved. Courts have the authority to dissolve partnerships and LLCs when partners can no longer function, or are incapable of running the venture together.
Gary Schuster, the court appointed receiver, secured an offer for the property of $7.5 million. Kings County Supreme Court Justice Leon Ruchelsman gave Zablocki the option to purchase the property for the same price as a proposed third-party offer the receiver had. If Zablocki had declined to buy the property, the option would have passed to Vashovsky. Zablocki bought the property and on July 31, and flipped it to Hudson Valley Resort Holding LLC the same day for $12 million.
History of the Hudson Valley Resort and Spa
The Hudson Valley Resort and Spa found itself struggling in the face of the economic downturn in 2008, and in 2010. In an effort to stave off foreclosure, its then-owner Eliot Spitzer (not the former New York governor) filed for bankruptcy. In 2010, the Chinese hotel conglomerate HNA Group purchased the hotel from the lender of its previous owner for $13.8 million. The HNA Group operated the hotel as the Hudson Valley Resort and Spa. The eight-story hotel with more than 323 rooms was renovated about 20 years ago.
In 2019, the HNA Group sold off about 16 acres to the Danenberg Family Farm, LLC for $100,000. Financially strapped and mired in bankruptcy back in China, HNA Group sold the balance of the hotel property to Hudson Valley NY Holdings (HVNY) LLC for $4.4 million. The principals were Zablocki and Vashovsky.
At around the same time, Vashovsky, was in a different partnership that was attempting to purchase the HNA Palisades Training Center on Route 9W in Palisades under the name Vasco Ventures for $40 million. His group lost its $8 million down payment despite efforts both in the bankruptcy court in the Eastern District of New York to delay default and in Rockland County Supreme Court to compel HNA to close.
Not long after the deal fell apart, Orangetown Supervisor Teresa Kenny and the town board stepped in to steer future development on the site, which remained privately owned by the HNA group. Over the past two years, the town tapped a California developer, Reveil, which tried unsuccessfully to reach an agreement to buy the 106-acre Palisades property from the HNA group. Orangetown briefly considered taking the property through eminent domain until SL Green, a New York State Real Estate Investment Trust (REIT) acquired the property in partial satisfaction of a $185 million arbitration award against HNA.
