Morgans Hotel Group Co. said Tuesday it has failed to reach a deal with lenders on restructuring terms of its loan on a Scottsdale, Ariz., hotel and is prepared to surrender the Mondrian property to the lenders.
New York-based Morgans Hotel stopped paying its $40 million mortgage and mezzanine loans on the property in June. The loans, which had been due June 1, are secured by its interests in the Scottsdale hotel.
The company owns or has a stake in boutique hotels such as the Clift in San Francisco, Delano in South Beach, Mondrian in Los Angeles, Ames in Boston and others.
The company has been trying to rejigger terms of its loans on various properties, as the economic downturn has curbed consumer and business travel, hurting revenue. In October, Morgans Hotel reached a deal with one of its lenders to lower the outstanding balance on a loan on the Hudson Hotel in Manhattan to $26.5 million from $32.5 million. That agreement also gave the hotel operator more leeway on the timing of paying back that loan.
Morgans shares fell 3 cents to close earlier at $4.45.