Hudson 1701/1706 - Case Summary
Business Description Headquartered in Los Angeles, CA, Hudson 1702, LLC and Hudson 1701/1706, LLC (collectively, the “Debtors” or the “Company”) were formed ...
Business Description
Headquartered in Los Angeles, CA, Hudson 1702, LLC and Hudson 1701/1706, LLC (collectively, the “Debtors” or the “Company”) were formed in March 2022 to redevelop the historic Hudson Hotel in New York, NY, into a multifamily residential property.
- The redevelopment plan originally envisioned approximately 440 market-rate rental units, supplemented by commercial space and a penthouse.
Following a prepetition foreclosure, all of the Debtors’ equity interests are now held by PV Hudson, LLC, an entity wholly owned by the project’s prepetition secured lender, Parkview Financial REIT, L.P.
Corporate History
The Company was formed on March 12, 2022, to acquire and redevelop the property located at 353 West 57th Street in New York, formerly the site of the Hudson Hotel, a well-known boutique hotel concept developed by hotelier Ian Schrager.
- At its inception, the Company’s sole member was CSC Hudson, LLC, an entity controlled by Alberto Smeke Saba and Salomon Smeke Saba (the “Smekes”), who oversaw the project from its formation through July 25, 2025.
- Construction to convert the hotel into residential units commenced in June 2022, with an original target completion date of May 2024.
Operations Overview
The Hudson Hotel property includes 39 single room occupancy (“SRO”) units, many of which remain occupied by tenants who are beneficiaries of New York City’s rent-stabilization laws. The presence of these SRO Tenants creates significant operational and regulatory obligations for the Debtors.
Life Safety Services
- The Debtors are required to provide for the health, safety, and welfare of the SRO Tenants and individuals working at the property.
- To meet these obligations, the Company utilizes certain “Life Safety Critical Vendors” who provide essential goods and services, including fire suppression, boiler maintenance, and elevator maintenance.
- The continued, uninterrupted provision of these services is crucial for maintaining compliance with local, state, and federal regulations.
Prepetition Obligations
As of the Petition Date, the Debtors have approximately $146 million in outstanding secured debt obligations, in addition to trade claims and lease obligations.
Secured Debt
- In May 2022, the Company obtained up to $207 million in financing from Parkview Financial REIT, L.P. (the “Prepetition Lender”) under a loan agreement comprising two facilities:
- A $81.8 million Building Loan.
- A $125.2 million Project Loan.
- The loans are secured by all assets of the Debtors. The original principals, the Smekes, also provided personal guarantees and a completion guaranty for the project.
- Prior to the filing, the Prepetition Lender foreclosed on the equity and credit bid $80 million of its debt, reducing the outstanding obligation to approximately $146 million.
- The Prepetition Lender also provided an emergency bridge loan of up to $1 million (the “New Advance”) immediately before the bankruptcy filing to fund critical expenses.
Unsecured & Other Obligations
- Life Safety Critical Vendor Claims: The Debtors estimate approximately $1 million in aggregate claims are owed to critical vendors, with roughly $250,000 requiring immediate payment to ensure continuity of essential services.
- Ground Lease: The Debtors occupy the property pursuant to a 99-year ground lease dated May 4, 2022, with 356W58 Ground Lessor, LLC.
Events Leading to Bankruptcy
The project has been plagued by regulatory issues, construction delays, litigation, and liquidity constraints since its inception, culminating in a complete halt of construction under a stop-work order. The primary driver of these issues stems from disputes with the property’s 32 single room occupancy (“SRO”) tenants.
SRO Tenant Disputes and Regulatory Halt
- As the property is located within New York City’s Clinton Special District, the Debtors were required to obtain a Certificate of No Harassment (“CONH”) from the NYC Department of Housing and Preservation Development (“HPD”) before making alterations.
- In September 2023, SRO Tenants presented allegations of harassment to a local community board, citing inadequate notice of utility shutdowns, poor pest control, positive testing for lead, and exposed wiring.
- Following an investigation, HPD issued an initial determination finding reasonable cause to believe harassment had occurred and recommended that the Company’s CONH application be denied. This determination was made while the Company was still under the control of the Smekes.
- As a result of the regulatory issues, the Department of Buildings issued a partial stop-work order in February 2024, which remains in effect and has stalled all redevelopment progress.
Equity Foreclosure and Chapter 11 Filing
- On July 25, 2025, the Prepetition Lender foreclosed on the equity interests in the Debtors, which had been pledged as collateral for the Project Loan.
- In connection with the foreclosure, the Prepetition Lender credit bid $80 million of its outstanding debt and its affiliate, PV Hudson, LLC, assumed full ownership of the Debtors.
- Faced with an idled construction project, ongoing regulatory disputes, and mounting liabilities, the Debtors and their advisors determined that a Chapter 11 filing was the only viable path to address the project’s distress and preserve value.