Pride Hotel was slated to open to the public last November under Marriott’s budget-friendly Aloft and Element hotel brands, according to the complaint filed in federal court. Instead, the hotel and its principals abandoned the deal with Marriott and began operating as a migrant shelter, without Marriott’s permission and in violation of their franchise agreement, the suit alleges.
The complaint says Pride Hotel's owners also didn’t remove Marriott signs and brandings or pay franchise fees, further violating their agreement. Heath Olnowich, an attorney for Pride Hotel, said the owners declined to comment. According to the complaint, the owners include New York residents Jai Patel, Krishna Mehta, Chandra Mehta, Jagruti Patel, and Vipul Patel.
The lawsuit, first reported by legal news site Law360, comes as dozens of New York City hotels have entirely shuttered to tourists and instead struck deals with the city to become migrant shelters — particularly in the area around Pride Hotel.
More than 1 in 5 New York City hotels are now shelters, which has pushed room prices to record highs, according to the New York Times. Nearly half of hotels around JFK Airport in Queens have become shelters, according to analysis by CoStar, a major provider of commercial real estate data.
Hotels are among the patchwork of more than 200 emergency shelter sites that the city has used to house more than 210,000 migrants since 2022, though most of the new arrivals have exited the city's care, officials say. Other migrant shelters include former office buildings, sprawling tent cities and houses of worship.
The city shelter contracts have also been a financial boon for some hotels struggling to recover from the pandemic-induced drop in tourism.
New York City currently pays up to $185 per night per room for hotels-turned-shelters, according to the agency. But city payments have at times surpassed market rates, and have ranged from $55 to $385 per night, according to a Bloomberg analysis in June 2023.
Other Marriott hotels have also become migrant shelters, including at least one other site in Jamaica. Lawyers for Marriott International did not respond to a request for comment.
Pride Hotel is an 18-story building with 283 rooms, according to its latest publicly available certificate of occupancy with the city's Department of Buildings.
In a letter that Marriott received last August, attorneys for Pride Hotel proposed another agreement, which would have allowed the property to be used for migrant housing, according to the complaint. The letter said it wasn’t “economically feasible” for the hotel to operate, given “the poor state of the economy and continued slowdown in the hospitality industry.”
“New York City is pressuring hotels in the metropolitan area to participate in its migrant housing programs," the letter stated.
Pride Hotel didn’t respond to Marriott’s follow-up requests, including default notices, the complaint says.
By Arya Sundaram
