Bankruptcy judge approves sale to Khatiwalas’ company
OCEAN CITY — The former Crown Bank building will join the ranks of numerous other Ocean City properties in the holdings of local brothers Raj and Yogi Khatiwala.
On Wednesday, Jan. 18, the sale of the historic downtown building was approved in U.S. Bankruptcy Court District of New Jersey, according to Ray Patella, attorney for Brian Thomas, bankruptcy trustee for the building. He confirmed the approval Friday.
The sale price was $6.675 million.
The building and another property on Route 50 in Estell Manor, which are owned by 801 Asbury Avenue LLC under Jim McCallion, had been in bankruptcy. The six-floor office building — including a first floor with a 30-foot vaulted ceiling that was home to the former Crown Bank — had been almost entirely filled with businesses. Under the latest ownership and then during the bankruptcy proceedings, most tenants moved out, leaving the building almost entirely vacant except for the Second Chance boutique on the ground floor.
Luxury hotel developer Eustace Mita, who partnered with Jay Gillian to save the Wonderland Pier amusement park at Sixth Street and the Boardwalk, had bid $6.5 million for the building, which includes five parking lots on the Central Avenue side. After Eclat Investments, the company run by the brothers, bid $6.675 million, Mita withdrew his offer, declining to bid higher.
In August, the city of Ocean City announced its interest in acquiring the building because of its location and parking lots, and had approved contracts for professionals to inspect the building, but after the high bids came in Mayor Gillian said the city would have to reconsider.
The official statement from the city was that it would wait until the bankruptcy proceedings had finished to decide how to proceed.
Although the brothers are relatively low-profile, Eclat Investments counts among its Ocean City portfolio The Forum at 800 Atlantic Ave., The Scarborough Inn at 720 Ocean Ave., The Pavilion at 801 Atlantic Ave., The Beach House at 819 Moorlyn Terrace, Stainton’s A Gallery of Shops at 810 Asbury Ave., Stainton’s Gallery by the Sea at 1216 Boardwalk, the Bluewater Inn at Eighth Street and Ocean Avenue and the Ocean Breeze Hotel at 724 Ocean Ave.
Eclat also recently acquired The Tahiti Inn at 1125 Ocean Ave.
The company also has The Aurora Inn Hotel and Event Center in Aurora, Ohio, and The Birch Glen Lodge in Cascade, Idaho.
Raj and Yogi Khatiwala were born in Atlantic City, grew up in Ventnor and went to Atlantic City High School before heading off to room together at Fordham University in New York.
Raj Khatiwala, who said he spent a dozen years in finance in New York City, told the Sentinel in December that Eclat bought its first property in Ocean City, The Forum Hotel, in 2019 and has continued to invest in the resort.
“Once we kind of saw Ocean City, we really loved the town, that it’s a dry town, a family environment,” he said. “We grew up with that in our household. A lot of the things that attracted us was the family environment and the wholesome nature. Ocean City is really nice.”
“As time progressed, we acquired more assets. A lot of properties came to us directly because (the owners) knew how we operate. I feel like we’re honest and humble people. We really don’t even like to be in the news,” he said in his December interview. “This is awkward for us, more so than anything else, to do an interview.”
Eclat Investments boasts $120 million in assets, but Khatiwala said he and his brother operate like a small company, like a “family mom and pop company.”
They don’t have definitive plans for the Crown Bank property.
“I’m not sure what our business plan is for the interior of the space,” he said in late December. “We haven’t had enough time to digest it. We definitely want to bring it back to life. The retail space, right now, we feel on Asbury it’s a very quiet corner. We want to bring a lot more life to it. We think that is probably the strongest corner on Asbury because it connects to Eighth Street, the corridor all the way to the beach.”
Patella said although the judge had already ruled on the sale of the building, it may take a month or so to close on the property.
“The sale to Ocean City Crown Holdings was approved by the bankruptcy court at the hearing held on Wednesday. We were able to successfully resolve all of the outstanding objections,” Patella said.
“The judge complimented all of the parties on reaching a resolution and the necessary orders will be submitted to the court for entry by the court once they’re agreed to by all the parties involved in the case,” he said.
“We hope to be able to close (on the sale) within the next month,” Patella said.
“We have reached a resolution with all the major parties in the case, including those who filed objections. There were four different objections that were filed and we were able to build consensus among all the parties to their satisfaction,” he said.
By DAVID NAHAN/Sentinel staff