A MAJOR lack of financing and a real estate market in the doldrums has stalled many developments leaving work on them in various stages of completion.
MIDTOWN
The most valuable hold is the former Hotel Drake site at the northeast corner of Park Ave. and East 56th St. that includes some pieces on East 57th St.
Assembled by Macklowe Properties for more than $500 million over many years, the hotel itself was finally demolished. Now a senior note is being sold with the winner expected to complete foreclosure proceedings, complete the assemblage of the final pieces of the site, and proceed with the development.
Nearby is the former YMCA at 610 Lexington Ave. to be developed with air rights from the Seagram Building. Here, RFR Holdings has a Shangri-La Hotel and condos waiting in the wings. A predevelopment loan was with Lehman Bros and the rest of the financing is yet to be put in place. Foundation work is proceeding.
Across from Carnegie Hall, Gary Barnett’s Extell Development has a Park Hyatt waiting to fill the gap on West 57th Street. Again, a construction loan will be elusive even with a premier site that will have spectacular Central Park views.
EAST SIDE
On the East Side, a steam plant was taken down in preparation for the $4.4 billion multi-building East River Realty project to be developed by Sheldon Solow just south of the United Nations along First Avenue. Solow, who owns the land free and clear, paid moe than $630 million to buy the site from Con Edison, and has spent another $100 million on environmental cleanups and demolition. The community fought over what should be allowed, Solow’s partners dropped out, and now he is in litigation with the State Department of Environmental Conservation over the availability of $250 million in cleanup money.
While hoping for a pact with the United Nations, Solow is so far without a major anchor tenant for any commercial building, and the city’s residential market is not conducive to new construction.
HARLEM
In Harlem, the long awaited first office tower to be developed in more than 30 years is once again canceled. The 21-story, 600,000 foot Harlem Park tower was to be built at 125th St. and Park Ave. by Vornado Realty Trust. Vornado had taken over the site when the first, inexperienced developer couldn’t get the project off the ground. That Vornado, a real estate investment trust which built the Bloomberg Tower at 731 Lexington Ave., can’t get this out of the ground is a telling sign of the poor state of the real estate market. But it is also a reflection of the high costs of city construction leading to sky high office rents in an area that couldn’t sustain them.
DOWNTOWN
Downtown, Time Equities has owned the site at 50 West St. for many years. CEO Francis Greenburger says he doesn’t have to make a decision on moving forward with a 65-story hotel and residential tower designed by Helmut Jahn until later this year and can then decide to “landbank” it for a better time.
He already has some permits and some financing for the new building.
