Full demolition of the Brooklyn Mirage has been approved and is set to start early next month as a battle over its future continues in bankruptcy court.
City records show that the Department of Buildings has signed off on a plan to completely dismantle the ill-fated venue, which never reopened due to safety issues after a massive renovation last year.
According to a notice circulated by Brooklyn Community Board 1, work is expected to start on Feb. 2 and wrap up in April or May.
It’s not clear whether the other two venues at the Avant Gardner complex, the Great Hall and Kings Hall, will be affected, though there are no upcoming events listed on the company’s website.
But the next steps for the Mirage are unclear.
Avant Gardner, its parent company, filed for bankruptcy last fall, citing massive financial issues caused by its failure to open the Mirage for the 2025 season. The company had spent months and millions of dollars building a “New Mirage,” which DOB inspectors never cleared for occupancy after uncovering serious structural and safety issues.
Gary Richards, the CEO of Avant Gardner, said at the time that the bankruptcy would serve as a “restructuring,” and was a “viable path” to stabilize the Mirage and move forward. Earlier this year, Brooklyn Magazine reported that nightlife brand Pacha would broker a deal to purchase Avant Gardner and reopen the Mirage as “Pacha New York.”
But a group of Avant Gardner’s creditors — people who are owed money and hoped to be paid back in bankruptcy proceedings — have pulled their support for the bankruptcy deal, as was first reported by Bloomberg Law.
In court filings, the creditors accused Axar Capital Management, a major lender that had been set to take over the venue, of secretly brokering a sale with a third-party buyer, presumably Pacha.
The creditors claimed the deal was kept secret from them and from the court and would “undermine” an agreement previously reached by Axar, the creditors and debtors.
That agreement included a contingent value right, or CVR, that would allow the creditors to participate in the post-sale Mirage and make their money back if the business turned out to be “wildly successful” and allowed Axar to recoup part of their investment.
Axar’s “secret” deal, the creditors claim, was “structured to avoid payment on the CVR,” which could mean the creditors would not have the opportunity to make their money back.
In court documents filed on Jan. 26, Axar said the creditors were “unreasonably withholding” approval of the CVR agreement. The lender said it has become “increasingly clear” that the business is unlikely to generate enough cash to trigger payment on the CVR, especially in light of the costs of renovating, reopening and running the Mirage.
Axar has asked the court to formally rule that creditors were acting unreasonably and allow the settlement and sale to go forward, and is awaiting a response.
