In a critical breakthrough for Hudson Yards, the MTA board is expected tomorrow to let Related Companies start $50 million of preliminary work on its Coach headquarters tower before the developer closes on its 99-year lease of the 26-acre site from the agency.
In exchange, Related will give up its right to defer closing until three citywide economic “triggers” have been met. The company founded by Stephen M. Ross also will commit for the first time to a firm closing date: June 1, 2013, although both Related and the MTA say it will likely occur sooner and possibly by this Dec. 31.
The agreement is anything but a technicality. Despite a recent blizzard of coverage touting the rail-yard project as an epochal achievement for Mayor Bloomberg, Related has yet to start building the Coach tower more than a year after a photo-op at which Ross, Bloomberg and Coach CEO Lew Frankfort said construction would start by this past summer.
“There’s been a lot of smoke. This is fire,” MTA director of real estate Jeffrey B. Rosen said yesterday.
MTA chairman Joseph Lhota recently told Realty Check that Related wanted unspecified “amendments” to its 2010 agreement with the MTA, which has yet to close.
The changes are not to the roughly $1 billion long-term lease, but mainly to the timetable. Related needs more time to wrap up contracts with its financial partner, Oxford Properties, and with Coach, other possible tenants and construction lenders.
Related’s 2010 agreement with the MTA didn’t allow the developer even to begin site preparation until the lease closed.
But Related needs to get moving immediately on the 47-story, 1.7 million-square-foot skyscraper at 10th Avenue and West 30th Street — a so-called “terra firma” site. Towers planned for later will rise from a platform Related must build over the two rail yards between 10th and 12th avenues and 30th and 31st streets.
Coach, which is buying 750,000 square feet of office space, needs to move in by mid-2015 when leases elsewhere expire. Two other possible tenants, L’Oréal and German software giant SAP, are also said to have firm deadlines for moving into their space.
An MTA spokesman said the agreement — approved yesterday by the agency’s Finance Committee and to be voted on by the MTA board tomorrow — lets Related begin excavation and foundation work at once, but not above-ground construction.
Related must complete the preliminary work before the tower can actually start to rise. The new agreement gives Ross wiggle time to put infrastructure in place so he can build in earnest once Related closes on the lease.
Prior to yesterday’s agreement, Related could have put off the closing indefinitely until three citywide economic recovery milestones were met — involving office vacancy rates, condo apartment prices and architectural billings.
Both Related and the MTA admit those markers have not been met and might not be for another year or more.
Additionally, the MTA said that when the closing takes place, Related’s payment obligations “will be adjusted so the economics for the MTA will be as if the closing were happening now.”
Related said work at the site was “imminent” following expected MTA board approval this week.
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Mega-restaurateur Stephen Hanson has sold the building that was home to his 3-star Italian eatery Fiamma — and in a wild twist, sources buzzed that the new owner has leased the five-story building’s three restaurant floors to the Altamarea Group.
Altamarea is the company in which superchef Michael White is a partner with money man Ahmass Fakahany — the same White who was Fiamma’s original chef before he and Hanson parted ways.
Last week, Hanson’s BR Guest Hospitality quietly closed on the sale of five-story 206 Spring St. for an undisclosed price not yet recorded in Department of Finance files. The buyer was Corigin Real Estate Group, a spinoff of Russian-owned Coalco, which developed the Element condo tower and owns several buildings leased to NYU for student housing.
Corigin director Jonathan Grzyb didn’t respond to requests for comment.
A lease to Altamarea couldn’t be confirmed. White couldn’t immediately be reached.
But sources said White — the talent behind the great 3-star Marea and I Fiori among other restaurants — has been “in and out” of the Spring Street location where he secured his culinary reputation at Fiamma in 2002.
“The building’s in fine shape, with great infrastructure for a new restaurant,” a source said.
Fiamma closed in early 2009, a victim of the recession. BR Guest had used it as a catering facility since then.
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No project outside the World Trade Center is more meaningful for Sandy-swamped downtown than the conversion of landmarked 70 Pine St., the former AIG headquarters, into luxury rental apartments.
So let’s keep straight what’s going on there. Last week, an architectural magazine blog made some wildly out-of-date statements about it.
The story was picked up on widely read Curbed.com, and it’s easy to imagine the wrong information ending up in future coverage elsewhere — as it already has in the TriBeCa Citizen.
No. 1: The project has not included a 300-room hotel since Metro Loft sold its stake in the building to Rose Associates, as we first reported way back on Aug. 6.
It will consist entirely of 775 apartments that Rose hopes to rent for the highest prices ever paid downtown, as we reported in another story about the project on Sept. 11. Lower floors might have “extended stay” units.
No. 2: Although the blog stated it was undecided how the tower’s penthouse floors would be used, Rose Associates co-President Adam R. Rose couldn’t have been more specific. He told us the top five floors would be a residents-only “Sky Club,” including a cigar lounge in the former 66th floor private observatory.
Meanwhile, our friends who live at 21 West St., the Rose Associates-owned rental tower, had only sweet things to say about their landlord in the wake of Superstorm Sandy.
“Rose has been wonderful,” said one pal who moved back in last week. He credited the landlord with “transparency” and doing everything it could to swiftly reopen the building after the flood damaged mechanical systems.
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The Brill Building at 1619 Broadway is the legendary music-industry address where thousands of classic pop songs were written and recorded, and which today is home to state-of-the-art studio and post-production facilities.
Now, landlord Stonehenge, headed by Ofer Yardeni, is launching a simulcast series, “Live at Stonehenge,” with popular social media platform Google+ Hangouts. The first will be on Nov. 29 at 8 p.m. in the Brill’s KMA Studios and feature Google+ sensation Daria Musk.
The public may attend virtually on Stonehenge’s Google+ page.
The Brill Building was recently in the news with word that longtime retail tenant Colony Records would soon close. The live simulcasts will remind New Yorkers that music is what the nominal “office” building still is about.
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How much will it cost to save Pier 40?
The under-utilized, 15-acre relic at the foot of Houston Street is troubled by decay, negative cash flow and a debate over its future.
The Hudson River Park Trust, which operates the pier, and the nonprofit Friends of Hudson River Park, the trust’s fundraising partner, have had clashing ideas of how best to ensure its long-term viability.
A concern on all sides is the need to shore up its pilings, which have been so weakened that the pier could be unusable in three years. The pier is taking in only $5 million a year and costs $7 million just to maintain in its present perilous condition.
Published estimates have claimed it will cost at least $100 million just to strengthen the pilings. But a new study commissioned by the Durst Organization found it would take much less to encase and rebuild the pilings.
The analysis by McLaren Engineering Group says it would cost $48 million at most and possibly as little as $30 million.
That’s partly because the pier — today home only to athletic fields, boat-repair shops, a parking lot and a few offices — no longer has to bear the load it did in the late 1950s, when it was designed to support railroad cars.
Douglas Durst is chairman of the Friends of Hudson River Park, but his rep said he ordered up the McLaren analysis not as the head of the Friends but as a “concerned citizen” along with Ben Korman, a Friends board member who once managed the pier.
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No column would be complete without an actual new office lease, so here’s what we’ve got this slow post-holiday week:
Renaissance Jewelry New York, which does business as Verigold Jewelry, has taken 11,735 square feet of space on the sixth floor of Charles S. Cohen’s 3 E. 54th St.
The company will move from 501 Madison in the first quarter. Asking rents at 3 E. 54th are $55 a square foot.
The tenant was repped by Savitt Partners’ Harlan Cygielman and Michael Dubin. Cushman & Wakefield’s Bruce Mosler and David Glassman acted for the landlord with Cohen’s in-house team of David Nevins and Marc Horowitz.