Bank Peddles Allegria Note

The Allegria Hotel is beset by more financial woes.

Brooklyn Federal Savings Bank has fielded at least two offers of about $20 million each for the $36 million note it holds on the lodge in Long Beach, and owner Allen Rosenberg could lose millions of the $60 million he personally invested in the project, according to the Long Island Business News. (Subscription required).

The bank has actively marketed the debt since Rosenberg’s Woodmere-based development company, Alrose Group, defaulted on the loan in 2010. The hotel’s development company, Alrose King David, is in bankruptcy — the hotel’s chapter 11 filing lists between $10 million and $50 million in liabilities to more than 50 creditors — and dozens of contractors are suing the company for money it owes for their work on the hotel.

Rosenberg said he still hopes to work out a deal, either with the bank or with the buyer of the hotel note. About his troubled finances that include $355,000 in unpaid city taxes, Rosenberg said:

“I don’t regret constructing the hotel. But it’s proven to be very seasonal. Off season is a big challenge.”

In 2008, when the financial-housing crisis hit, the 153-room luxury hotel was under construction on the boardwalk at West Broadway and National Boulevard, replacing the former King David Manor, which operated as an assisted-living facility until about 2006. While the hotel was originally expected to open in early 2009, its rooms only partially opened by the late summer 2010.

Rosenberg purchased the King David property for $21 million in August 2007. The following April, the Long Beach Zoning Board of Appeals approved Rosenberg's hotel proposal with conditions. First, he had to add two stories to the building in order to attain a four or five-star status for the hotel and include a pool and spa. The spa, though, has yet to be completed.

The hotel also had to increase parking capacity. While Rosenberg added on-site parking, his off-site parking options — which included a lot behind the Long Island railroad station and the possible purchase of the vacant property at 50 W. Broadway, adjacent to hotel — never materialized.

The hotel, where in-season rates for rooms climb as high as $400, also brings in revenue through its catering business.

Long Beach historian Roberta Fiore pointed out that since the 19th century, luxury hotels in Long Beach were hurt during the winter months, and she believed the city’s seasonality has not changed. Rosenberg previously said that this is why the hotel needed a spa. “Plus, Long Beach has evolved into a year-round community, and you have many great restaurants there," he added. "It’s not the Long Beach of 20 or 30 years ago.”

Rosenberg did not return several calls requesting comment on the LIBN’s report.