Two High School Friends + One Hotel = Trouble

When the imposing, 21-story neighborhood lightning rod Cooper Square Hotel finally rolls out its sprawling, three-floor bar and restaurant program this summer—complete with an angry-neighbor-friendly “soundbaffling” terrace—what will the developers do as an encore next door?

Another innovative noise-reducing restaurant? A whopping whole other shark-fin-shaped hotel? Perhaps the bigger question: Will affable hotelier Gregory Peck still be around to see it?

Mr. Peck declined to comment about possible construction next door; his supposed partner in the Cooper Square Hotel at East Fifth Street, Matt Moss, won’t discuss plans for the site, either. “We haven’t really publicly commented on what our plans are for those properties,” he told The Observer, deferring further questions to a publicist.

Even some of the hotel’s own investors are having a tough time getting answers.

“I believe I am being and have been excluded from decisions, which as an investor member I have a right to participate in,” said stockholder Robert Becker, who, frustrated over long-ignored questions about this “next phase” of the project, went public with his complaints, posting an angry letter to Mr. Moss on his personal Web site this week.

Mr. Becker said he was “surprised” to find out that several other Cooper Square investors, led by Long Island financier Charles Feinbloom, who also owns two Hilton hotels in Plainview, N.Y., recently purchased the two lots directly adjacent to the nearly completed hotel, without so much as a head’s-up from Mr. Peck or Mr. Moss.

“These lots were to become, possibly, a restaurant-lounge and/or expansion to the Cooper hotel so we (Cooper investors) would be able to leverage the brand, amenities and staff of the Cooper Hotel next door,” according to Mr. Becker’s letter.

Albeit owning just a modest stake in the more than $65 million Cooper Square development, Mr. Becker had been hoping to boost his assets with a piece of the property-acquisition action, which the hotel’s head honchos had discussed only months before. “It remains my understanding,” he wrote, “that all investors in the Cooper Hotel would be given the opportunity to participate in the purchase of these adjacent properties when, and if, they became available.”

Mr. Moss suggested that the land deal was above-board and that all the investors were unified—except for Mr. Becker. Perhaps not surprising is the fact that the aggrieved investor came to the project not through Mr. Moss, but rather through Mr. Peck, an old family friend, who seems to know a thing or two about getting brushed to the side of a promising development, too.

The testy investor relations merely underscore a lingering rift between the Cooper’s two principals, Mr. Moss and Mr. Peck, former high-school classmates from Long Island, both in their early 30’s, whose prior friendship didn’t exactly translate into a workable business relationship.

Coming into the Cooper Square deal, Mr. Peck was a young hotelier who, having worked alongside industry titans Ian Schrager and André Balazs, had just acquired the first hotel of his own, the Crescent Hotel in Beverly Hills, and was looking to open another in downtown Manhattan.

“I had been negotiating and was very close to acquiring what is now the Bowery Hotel,” said Mr. Peck, who ultimately lost the space to local hospitality honchos Eric Goode and Sean MacPherson. “Fortunately, I was able to find a property up the road on Cooper Square.”

Mr. Moss, meanwhile, a former employee of the Related Companies, had just finished building Riverhead Centre, a 50-acre, 400,000-square-foot shopping center in Long Island.

They decided to join forces. “The timing was good for us, in terms of finding the opportunity, and wanting to try to develop it,” Mr. Peck explained. “We moved forward and started putting the pieces together, which is a lot, you know, from investors to the professional team, which includes the architect, Carlos Zapata.”

Mr. Zapata and Mr. Peck had already known each other many years. “We looked at doing several other projects together,” he said.

Two High School Friends + One Hotel = Trouble