Charles Cohen loses former Arrowwood property at foreclosure auction; Fortress Group takes control

November 13, 2024 at 11:14 p.m.

Charles Cohen speaks to the Rye Brook Board of Trustees and public at Village Hall on Apr. 24 about his proposed plans for 975 Anderson Hill Rd. (File Photo/Westmore News)

Billionaire real estate mogul Charles Cohen’s dreams and plans for a boutique wellness hotel, conference center, apartments and townhouses for 975 Anderson Hill Rd. in Rye Brook are now dead and gone.

They died in less than 12 minutes during a foreclosure auction that started at noon on Friday, Nov. 8, in a conference room at the law offices of Kirkland & Ellis at 601 Lexington Ave. in Manhattan.

That’s where auctioneer Matthew Mannion presided over a well-advertised sale of Cohen’s properties that had been pledged as collateral for loans from the Fortress Investment Group.

When no bidder offered anything for the former Doral Arrowwood property, Fortress wound up taking possession for $37.7 million.

Reporter Fred Nicolaus of the business website Business of Home, which covers the interior decorating industry, was one of two reporters on a Zoom conference call in attendance (the other identified reporter was from Bloomberg News).

Nicolaus provided the Westmore News with a recording of the proceeding and the following background on the auction, which started with Cohen’s Design Center of America in Manhattan being the first property on the auction block:

“There were no qualified outside bidders, and the property now changes hands to Charles Cohen’s lender, Fortress Investment Group, for a hammer price of $76 million.

The auction included additional assets owned by Cohen, though Fortress ultimately only chose to purchase three of them—the Le Méridien Hotel Dania Beach in Florida, for $30 million; his Doral golf club development in Westchester, New York, for $37.7 million; and British film distribution company Curzon for $5 million. Altogether, the sale generated $148.7 million, all of which will go toward reducing Cohen’s nearly $600 million debt to Fortress.

The auction, originally scheduled for July of this year, was postponed by a legal dispute. According to the auctioneer, Matthew Mannion, the marketing for the sale generated interest from 127 potential bidders who signed NDAs, 86 of whom got a look at a data room containing information on the assets. Ultimately, they either didn’t meet the necessary criteria to bid or simply weren’t interested. Fortress purchased the assets in a credit bid, meaning they were able to apply the money owed to them to make ‘commercially reasonable’ offers.”

The properties that Cohen pledged as collateral to Fortress and now by default in Fortress’s hands essentially gut Cohen’s real estate empire. A search of Cohen’s business website (https://www.cohenbrothersrealty.com/) showed as of Tuesday, Nov. 12 that the reality of the auction is slowly sinking in with those who administer his public face. They have dropped all references to new projects like 975 Anderson but still maintain pages for the foreclosed Ft. Lauderdale hotel and the New York Design Center.

Cohen’s debt situation is so drastic that, as reported in our Nov. 1 issue, Fortress is seeking to foreclose on his Greenwich, Conn. home, his yacht and other possessions to make themselves whole.

As Nicolaus concluded in his story:

“As for Cohen—who also owns the Pacific Design Center in Los Angeles, the Decorative Center Houston, and the Decoration & Design Building in New York—the next chapter also includes many unknowns. He personally guaranteed $187 million against the original loan, meaning that, in addition to pursuing further action against Cohen Brothers Realty, Fortress can look to sue him directly to recoup their losses—though the billionaire landlord’s lawyers are fighting the issue on appeal.”

Doral Greens Homeowners reaction

Last Friday, Nov. 8, the foreclosure of 975 Anderson was treated like bulletin news by David Ruzow, president of the Board of the Doral Greens Homeowners Association (DGHOA), whose land adjoins the now former Cohen property.

He sent out an e-mail alert to homeowners about the sale and provided the following statement to the Westmore News:

“We are disappointed, because we think Charles Cohen was planning to build a first-class hotel and residential development.

Since the lender now owns the property, we don’t know what the future will hold for the property, but hopefully it will be sold to a developer who shares the same kind of first-class development that Charles Cohen was planning.

We wish Charles and his team well.”

Cohen was in the process of finishing demolition of the old Doral Arrowwood facilities—including the hotel and conference center. His legal and design team was working on the Draft Environmental Impact Statement (DEIS) that is required by the Village of Rye Brook for any development on the site.

Village of Rye Brook weighs in

The 975 Anderson Hill Rd. foreclosure sale also sent shock waves through Rye Brook’s government, as a project which when completed would have yielded substantial property tax revenue both for the Village and the Blind Brook School District was suddenly financially vaporized.

Chris Bradbury, the Village administrator, issued the following statement after being asked by the Westmore News for comment:

“The Village has been carefully following the foreclosure auction last week and is disappointed that Mr. Cohen’s company no longer owns the property at 975 Anderson Hill Road (formerly Doral Arrowwood). Although review of his company’s proposed development was just beginning, the Village was excited about its prospects and hopes that the next property owner has similar vision which would ultimately bring significant commercial tax revenue to the village and be a destination development for Rye Brook. We have been in contact with Mr. Cohen’s land use attorneys and are also reaching out to Fortress Credit Corporation, as the new owner, to determine their next steps. The Village is pleased that the former hotel buildings have been demolished at the site, which could have been a safety issue if they remained, and will be urging the new property owners to be good neighbors in terms of property maintenance and keeping the site safe.”

Cohen spokespeople silent

The Westmore News unsuccessfully sought comment on the status of the legal and DEIS efforts for 975 Anderson from Cohen’s White Plains-based legal team at Zarin & Steinmetz LLP and their attorney and partner Brad Schwartz.

Whether their legal and DEIS bills are being paid at this hour by the new 975 owner, Fortress, is an unanswered question.