Mumbai: After Rs 439 crore default, plot for 125-storey hotel on the block – Times of India

MUMBAI: More than a decade ago, the country’s tallest 125-storey luxury hotel was to be built on this prime sea-facing Charni Road plot in south Mumbai. Sometime later, the developer changed the design and proposed two 60-storey residential towers on the 2.2-acre plot. All the plans came to naught, though.
The land will be auctioned this Friday after the developer, Marine Drive Hospitality, part of the DB Realty Group, defaulted on a Rs 439 crore loan from IFCI and the Central Bank of India.
The Edelweiss Asset Reconstruction Company (EARC) has put the property on the block and fixed a reserve price of Rs 485 crore.
It will be sold on the “as is where is”, “as is what is”, and “whatever there is” basis on August 21 to recover dues totalling Rs 473 crore with interest, costs and charges. Last November, EARC’s authorized officer took symbolic possession of the property after “the borrower/guarantors failed to repay the amount”.
Property market sources said it will be interesting to see who bids for this plot because there are several stakeholders and encumbrances. Pune’s Panchshil Realty had picked up a stake in the project for 25 apartments spread over 50,000 sq ft area. It had also extended a loan of Rs 150 crore for it to DB.
Around three dozen tenants who lived on the property and were eligible for rehabilitation by DB on the same plot have also raised objection to the auction. These tenants issued a public notice challenging the auction, claiming they had given their consent for rehabilitation to a “specific developer”. “In such an event, the redevelopment cannot be carried out by any other person or party,” they said.
The plot, next to SK Patil Udyan near Charni Road railway station, was being jointly developed by DB and Panchshil Realty but work on the two high-end towers got stalled last year over non-payment of loans. Bookings for the project were returned and some advances are yet to be paid back with interest.
The plot has a history of litigation and been jinxed for the developer for more than a decade. D B acquired it from Suresh Estates in 2005. The developer initially planned India Tower (Park Hyatt) with 125 floors. It fought the state’s refusal to grant it higher floor spce index (FSI) in the Supreme Court.
In 2011, BMC issued a stopwork notice to the hotel project for failure to pay Rs 200 crore in arrears. It charged a premium for building concessions sought by the developer. Later, DB shelved the hotel plans over financial viability and started scouting for a partner to develop the plot for a residential project.