Stephen M. Ross‘s Related Cos. has a leathery catch on the line for its planned Hudson Yards development project — New York-based luxury goods maker Coach, Inc.
Sources told us booming Coach is prowling for up to 600,000 square feet of office space on the West Side for a new corporate home. Coach has been “exchanging paper” with Related regarding Hudson Yards as well as with other landlords in the area, the sources said.
Publicly-traded Coach was founded here in 1941. Its leather bags, accessories and other products are sold at 400 stores in the US and Canada, including eight in Manhattan. But few shoppers know that Coach is also a big office-space user.
The company owns its 265,000-square-foot headquarters building at 516 W. 34th St., which it once used for manufacturing and where it still maintains a small factory to produce samples.
It also has a few hundred thousand square feet at 450 W. 33rd St. and at a smaller building on 34th Street. “Now, they’ve outgrown their premises,” a source explained.
There’s no letter of intent for Hudson Yards, at least not yet. But a source described the Related talks as “still a work in progress but very serious.” Financially strong Coach currently has around $1 billion in cash on its balance sheet to play with.
The 26-acre Hudson Yards site bounded by 10th and 12th avenues between West 30th-33rd Streets — most of it above the West Side rail yard — is to be developed by Related and OMERS, the Ontario Municipal Employees Retirement System. Last May, Related signed a deal with the MTA to lease the site for 99 years, with the partners putting in a $21.75 million deposit.
The project is eventually to include 21 million square feet of development. The master plan calls for three corporate headquarters sites, 5,000 apartments in nine buildings, “destination” retail, a luxury hotel, a new public school, cultural facilities and 12 acres of public open space.
It was understood last night that Coach and Related weren’t focused only on one of the office sites, but were exploring “options” at all three.
The MTA/Related deal is contingent on several economic-climate yardsticks. As is typical of such public-private arrangements, it’s full of escape clauses and trap doors allowing either side a way out. Moreover, Related must first build a platform over the tracks.
But Related has said previously that with a tenant, work could start as early as 2012. And, if history proves anything, nothing can get a huge project off the ground — and make all the issues go away — like a tenant commitment.
Comment was declined by all parties involved, including reps for Related/OMERS and Coach’s real estate brokers, CB Richard Ellis’s Mary Ann Tighe and Gregory Tosko.
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The Port Authority has formally finalized its “backstop financing” agreement with Larry Silverstein for 4 World Trade Center, a milestone which allows the developer to finally place $1.3 billion in Liberty Bonds for the $1.8 billion tower.
At its Nov. 18 board meeting, the PA “essentially threw holy water on the final documents,” a source said. The PA agreed to minor financing modifications requested by bond-rating agencies — “very technical stuff that doesn’t affect the deal with Larry.”
Silverstein is now expected to start placing the tax-exempt bonds, which enable him to borrow more cheaply, in mid-December. A source estimated that they’ll be offered at between 150 and 200 basis points less than their taxable equivalents.
The bonds have been in escrow. Converting the bonds into a construction loan will enable 4 WTC to soar from its current seventh-floor level to its ultimate 64 stories. The PA itself will be an anchor tenant with about 800,000 square feet of the tower’s total 2.1 million feet.
Meanwhile, $1.3 billion more in Liberty Bonds remain in escrow for 3 WTC, which won’t be built until Silverstein secures private financing and until he has a tenant commitment. But don’t be surprised when it pokes out of the ground well in advance of that.
Next year, steel for 3 WTC will rise to the seventh floor as part of a requirement for Silverstein to construct its “podium” to support infrastructure for the PA’s Santiago Calatrava-designed transit hub. So, by the 10th anniversary of 9/11, the site will look as if three huge office towers are rising at once.
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Dow Jones & Co. has renewed on a whopping 115,000 square feet at Douglas Durst‘s 1155 Sixth Ave. Terms of the 10-year lease were not disclosed. Online databases list several other floors in the tower asking $55 and $60 a square foot, but a source said the Dow Jones deal was more “competitive.”
Dow Jones, which is owned by Post parent News Corp., has been at the address since the mid-1990s. Lease negotiations for the company were led by CB Richard Ellis’s Timothy Dempsey with a team including Mary Ann Tighe, Lauren Crowley, Christopher Mansfield and Kenneth Rapp. Durst was repped in- house.
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Chapdelaine & Co., a credit market-focused sales, trading and origination broker dealer, is doubling its space at Jack Resnick & Sons’ 199 Water St., renewing on 35,000 square feet and adding 35,000 square feet on another floor. Jones Lang La Salle repped the tenant and Res nick acted in- house.
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Regus, a lead ing provider of innovative work place solutions, has signed a lease for its newest Manhattan business center at the Rudin Family’s 41 Madison Ave., at 26th Street. The company has taken the entire 25th and 31st floors comprising 26,112 square feet. scuozzo@nypost.com