Bank of Hope is foreclosing on a Mount Vernon business that placed its hopes on a hotel linen service it saw as a certain bet in 2016.
The bank demanded nearly $2.7 million from Regent Hospitality Linen Holdings LLC, in a July 10 complaint filed in Westchester Supreme Court.
In 2016, the Mount Vernon Industrial Development Agency granted Regent nearly $1 million in tax subsidies to build a $6.1 million industrial laundry in a warehouse at 130 S. Columbus Ave.
Regent also received a $250,000 Empire State Development Capital Grant.
The managing partner, Mandy Mok Lema, of Woodhaven, Queens, depicted the linen service as a safe investment for the city in a presentation to the IDA board.
The company had already lined up enough hotel customers to make it profitable, she told the agency.
New York City hotels, she explained, clean their sheets and towels and bathmats off-site, so as to devote as much space as possible to the rooms and other sources of revenue.
“Hotels can”™t operate without bedsheets,” she said. “There are 100,000 hotel rooms. They have to have that service.”
By servicing 2,000 rooms, Regent projected a net profit of $1.7 million on annual revenues of $7.7 million.
Lema said Regent would create 25 to 35 jobs in the first year and another 10 to 15 in the second year. If business grew, she told the IDA, Regent might open a second laundry in Mount Vernon.
BBCN Bank of Flushing, Queens, loaned $3.6 million to Regent, guaranteed by the U.S. Small Business Administration. BBCN merged with another bank in 2016 and took the name Bank of Hope.
In January ”“ pre-Covid-19 and the drastic decline in tourism and business travel ”“ Bank of Hope notified Regent that it was in default and it demanded payment of the $2.7 million balance.
Regent has not repaid the loan, the bank claims.
Bank of Hope is asking the court to compel Regent to identify all collateral and allow it to foreclose on the property.
The bank also sued Lema and partners Xiao Dong Zhao, of Albertson, Nassau County, and Ingrid Almanzar, of East Stroudsburg, Pennsylvania, who guaranteed the loan.
The bank is represented by Manhattan attorney John M. August.
