By MADDY VITALE
A buyer for the nearly 100-year-old landmark Crown Bank building in downtown Ocean City was approved in bankruptcy court this week.
The deal is expected to be finalized in about a month to sell the building and its adjacent parking lots for $6.675 million. The buyer is Raj Khatiwala and his brother, Yogi, of Crown Holdings LLC.
Raj Khatiwala, of Ocean City, and Yogi are the founders of the real estate investment company Eclat Investments and they own numerous properties in town, some recently purchased.
The Crown Bank building, at the corner of Eighth Street and Asbury Avenue, was listed for $7 million in bankruptcy court in Camden before Judge Andrew B. Altenburg Jr.
After a couple of postponements by the courts, the matter was heard on Wednesday.
“The sale to Ocean City Crown Holdings LLC was approved by the Bankruptcy Court at the hearing held on Wednesday, Jan. 18,” said Ray Patella, attorney for the Chapter 7 bankruptcy trustee, Brian Thomas. “We were able to successfully build consensus among all of the parties in the cases to resolve the outstanding objections to the sale.”
The only other bidder had been Eustace Mita, owner of Icona Resorts, who offered $6.5 million as part of his plan to transform the property into a luxury boutique hotel.
Patella, of Javerbaum, Wurgaft, Hicks, Kahn, Wikstrom & Sinins P.C., a law firm based in Springfield, N.J., noted that the judge was pleased with how the matter was handled by the parties.
“The judge complimented the parties on reaching a resolution and each of the parties at the hearing also expressed their satisfaction with the result,” Patella said of the proceeding. “The necessary orders will be submitted to the court for entry once agreed to by the parties.”
He said the hope is that the transaction will be completed within a month.
“The trustee now looks forward to closing the transaction with the buyer and delivering the agreed upon value to all parties in the cases and bring these cases to a successful resolution,” Patella added.
Raj Khatiwala could not be reached for comment. It is unclear what his plan is for the building or whether it could become a mixed use of retail and hotel space.
Brian Thomas, the trustee for the property, gave some reasons in court documents why he felt the Khatiwalas were the right buyers.
“I believe that the Crown Holdings offer is the best and highest offer for the properties,” Thomas said as part of his recommendation to select Crown Holdings LLC.
The Khatiwalas own several properties in town, from retail shops to hotels and a B&B.
Among their Ocean City businesses are The Scarborough Inn, The Beach House, The Pavilion, The Forum, Bluewater Inn Hotel and Ocean Breeze Hotel.
They also own Stainton’s A Gallery of Shops in the downtown and Stainton’s Gallery by the Sea on the Boardwalk.
Stainton’s A Gallery of Shops is across the street from the six-story Crown Bank building. The building dates to 1925. It is a 33,440-square-foot concrete building consisting of five floors and a mezzanine area.
As part of the property sale, there are five parking lots and multiple possible uses.
“Subject to municipal approvals, possible future uses for the building include, but are not limited to: downtown luxury hotel use; residential condoing; nursing home/senior housing use; dormitory for J-1 Visa students,” according to a description on real estate websites.