The owner of the lavish hotel development that was planned in Coachella has filed for bankruptcy after lawsuits and delays harmed its viability.
Glenroy Coachella LLC, which owns the Hotel Indigo development, sought Chapter 11 protection in Los Angeles last week. The entity listed assets of $50 million to $100 million and liabilities of $10 million to $50 million.
The bankruptcy filing comes after Stuart Rubin, manager of the project, faced a lawsuit from his business partner, Gary Stiffelman, for $50 million amid allegations of “incompetence and fraud.” The lawsuit alleged that the development burned through two separate budgets of $25 million without producing much.
Construction on the project, along Avenue 48 near I-10 in Coachella, began in early 2017 under the guidance of Rubin’s son, Joseph, and was met with delays almost immediately, according to the lawsuit by Stiffelman. Initial site infrastructure was completed and some of the structures were partially developed.
The project was supposed to be completed in time for the 2018 edition of the Coachella Valley Music and Arts Festival and the Stagecoach country music festival, according to the lawsuit. After it missed the time window for that to happen, a new opening date in time for the 2019 Coachella festival was announced, but that also came and went amid the ongoing issues.
Hotel Indigo Coachella had been promoted as a luxurious, 35-acre resort close to the festival grounds, with many amenities, including a giant DJ stage, catwalk, 10,000-square-foot pool, casitas and 250 guest rooms.
It is unclear at this point if and when the hotel project will be reconstituted – whether based on its original development plan or a new one – with new capital and/or partners.
