CINCINNATI — Three months after selling the retail and office portions of Carew Tower to a New York investment firm, the owner of the iconic building’s hotel wing is facing foreclosure.
A Nov. 7 complaint alleges Cincinnati Netherland LLC owes nearly $77 million on a 2019 loan that has been in default since March 2021. A companion motion for the appointment of a receiver alleges the company owes an additional $10.6 million for taxes and fees to state and local governments and unpaid bills from business partners. That includes $2.7 million for franchise fees that allow the 561-room hotel to operate as the Hilton Cincinnati Netherland Plaza, Cincinnati’s largest convention hotel.
“A receiver is critical in this case to preserve and protect the property so that it does not deteriorate while this case is pending, including lose its franchise with Hilton,” said the receivership motion. “In addition, a receiver will coordinate the transfer of ownership and management of this hotel upon completion of a foreclosure sale.”
The foreclosure case could spell the end of Carew Tower’s ownership by Greg Power, a commercial real estate broker who acquired the landmark property in 2014 by buying a controlling interest in Belvedere Corp., a real estate development company that owned the building for more than two decades.
The WCPO 9 I-Team tried to reach Power via text and through his attorney. Neither responded.
Known for its art deco design and "city within a city" concept that was copied by later downtown properties, the Carew Tower complex is known to generations of Cincinnati families as a place to dine, shop, celebrate weddings and work.
Power called it "one of the most unique and special properties in the country, and a jewel in Cincinnati’s crown" in a press release announcing his purchase eight years ago. “I’m excited to be a part of its history and am looking forward to ensuring it remains a vibrant force in our city.”
But a steady stream of office and retail tenants left the building in the last decade and Power was unable to navigate the 49-story tower’s conversion to residential housing. In 2017, Power filed documents with the county that split the Carew Tower complex into three ownership units. Last November, a New York-based investment company sued to foreclose on a $9.7 million loan for the office and retail portions of the property, ultimately forcing their sale in August.
The new owner, Victrix Investments CEO Anoop Dave, is pursuing a residential conversion of the former Macy’s headquarters building downtown. He’s expected to do the same at Carew Tower but is yet to announce plans for the property. After the $18 million sale, Dave filed a $5.1 million lien against the hotel property on behalf of the Carew Tower Condominium Association.
Power dismissed questions about the lien in September, when real estate attorney Tim Burke suggested it could point to financial problems for the property.
“The hotel’s doing great,” Power said. “Everything is fine there.”
The lien is now part of the $87.6 million in debt that now hangs over the hotel property, according to this week’s foreclosure filing.
That debt allegedly includes:
- $76.9 million owed on a 2019 mortgage loan that was split into three smaller commercial-backed mortgage securities notes, then bundled with other loans and sold to investors in 2019. Wells Fargo Bank, acting as trustee for the original $72.5 million loan, declared a default in March 2021 after Power started missing payments in December 2020, according to a default notice filed with the foreclosure complaint. It alleges Cincinnati Netherland LLC owed $76.9 million on Oct. 31, with interest accruing at $22,185 per day.
- $2.7 million in past-due franchise fees from Hilton Franchise Holding LLC. It threatened to remove the hotel from its reservation system in October before Power promised a $1 million payment, according to emails attached to court documents.
- $2.2 million owed to state and local governments, including unpaid hotel taxes of $1.25 million, water and sewer fees of $716,000 and state sales tax liens of $200,000.
- $714,779 owed to three contractors that filed mechanics liens against the company: M & H Building Services LLC, Ivey Mechanical Company LLC and Icon Environmental Group LLC.
Hamilton County magistrate Anita Berding has scheduled a Nov. 22 hearing on the motion to appoint a Cleveland-area hotel industry veteran as the property’s manager in receivership. John Gaydos works for Charlotte, N.C. -based GF Hotels and Resorts, which proposed fees of $8,500 per month plus expenses for its work as receiver.
