By MADDY VITALE
The sale of the landmark Crown Bank building in downtown Ocean City closed this week, making it official that two local brothers will take control of the nearly 100-year-old property, saving it from public auction.
The property was edging toward public auction, which was slated for Feb. 21, until last month when a federal bankruptcy court judge approved the sale of the building and its adjacent parking lots for $6.675 million to Raj Khatiwala and his brother, Yogi, of Crown Holdings LLC.
“We closed on the sale of 801 Asbury Avenue on Feb. 15,” said attorney Raymond Patella who represented Brian Thomas, the property’s bankruptcy trustee.
Patella said that with the sale, Thomas was able “to immediately distribute over $6 million to the debtors’ secured creditors, judgment holders, and other creditors.”
He said the trustee was pleased.
“By any measure, the sale and transfer of the real estate to Crown Holdings is a huge success and allows Crown Holdings to move forward, renovate and develop the property free of any restrictions of the bankruptcy and was the greatly preferred alternative to an auction,” Patella explained.
The bankruptcy proceedings started nearly two years ago.
Patella said the sale “ends the principal portion of a contentious bankruptcy that started almost two years ago in May 2021.”
“Mr. Thomas and his professionals were able to successfully negotiate with the various constituencies, all of whom had divergent interests, to bring agreed upon value to all parties,” he noted. “He can now focus on winding up the remaining matters in the estates in due course.”
It is unclear at this time what the Khatiwalas have planned for the property, but a portion of the building may be used for retail space.
Raj Khatiwala, of Ocean City, and Yogi are the founders of the real estate investment company Eclat Investments. The Crown Bank purchase adds to their list of properties recently purchased in town.
They 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.
The iconic 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.
Altenburg approved the sale to the Khatiwalas last month.
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.
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 also 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.
