The Allegria Hotel in Long Beach will go on the bankruptcy auction block next month.
The hotel will remain open for guests and events, according to Central Islip-based Maltz Auctions, which is handling the sale.
The sale of the 143-room luxury hotel is set for 1 p.m. July 19 in the hotel, according to Maltz’s online listing.
The company that operates the hotel, Alrose Allegria LLC, filed for Chapter 11 bankruptcy protection in July in the Southern District of New York in Manhattan after the New York tax department seized one-third of the hotel’s rooms for tax debts and interest valued at more than $6 million.
The hotel’s real estate is valued at $27.4 million, and its debts total $39 million, according to a federal bankruptcy court document filed in March. It has about 150 full-time and part-time employees, according to the bankruptcy trustee.
“The hotel is operating profitably,” said Kenneth Silverman, the bankruptcy trustee. It is “booking events, making substantial improvements and anticipates a wonderful summer season.”
Weddings and other events will take place as scheduled, and the hotel is accepting new event bookings and hotel reservations, a spokeswoman for Maltz Auctions said.
On the hotel’s website, rates for Saturday range from $549 for a room to $799 for an oceanfront suite. On Labor Day weekend suites cost up to $1,049.
The company that owns the property, Alrose King David LLC, made its own bankruptcy filing in March. Last year, hotel owner Allen Rosenberg of Woodmere said the bankruptcy filing was the only way to regain control of rooms seized by the state tax department in time for the busy Fourth of July holiday.
It was Alrose King David’s second bankruptcy filing; the first was in 2011.
The Allegria, which opened in 2009, suffered damage from Tropical Storm Irene and superstorm Sandy and “did not return to ‘normal’ operations until 2014,” Rosenberg wrote in a court filing in March.
In December, lender Stabilis Fund IV LP sued to foreclose on the hotel, stating that it was owed $31.7 million plus interest and fees, Rosenberg wrote. Federal, state, county and city tax agencies filed tax liens on the hotel, although some of those liens were discharged, he wrote.
Rosenberg could not be reached for comment yesterday. An attorney for Alrose King David, Barry Gene Felder, declined to comment and referred a reporter to Silverman.
All but one of the Allegria’s hotel rooms were booked for Memorial Day weekend, Silverman said.
Its amenities include a restaurant, lounge and bar, conference and wine rooms, a 3,100-square-foot ballroom, 4,600-square-foot penthouse and a rooftop pool and a fitness center. Its annual property taxes total more than $357,000.
A new hotel management company was appointed in April, and it is making improvements, according to the spokeswoman for Maltz Auctions.
No minimum bid for the hotel had been determined as of yesterday, although bidders must present a bank check for $2 million.
Demand for hotels on Long Island appears to be strong. Hotels here had an average occupancy of 75.7 percent in April, up 5.2 percentage points from a year earlier, according to Tennessee-based data company STR. By contrast, across the United States, hotels had an average occupancy of 68.1 percent, STR reported.
Even so, the Island’s geography poses challenges to hotel operators, since travelers rarely pass through on their way to other destinations, said hotel consultant Steve Rushmore.
Long Beach in particular might appeal to business travelers visiting Mineola or Garden City for a week or more, but it is unlikely to attract business travelers visiting for shorter stays, Rushmore said.
However, he said, the city “has the advantage of being on the water, and it has a resort feel to it.”