Posted May 2, 2011, 1:05 PM
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New Yorker for life
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Join Date: Jul 2001
Location: Borough of Jersey
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http://online.wsj.com/article/SB1000...877756770.html
Tower Dreams
Developer Seeks Park Avenue Comeback.
By CRAIG KARMIN And ELIOT BROWN
May 2, 2011
Quote:
A venture of CIM Group and Harry Macklowe has hired architect Rafael Viñoly to design a slender, soaring tower on Park Avenue as Mr. Macklowe attempts to pull off his second major comeback.
The 73-year-old, who rebounded the first time after losing properties in the commercial-real-estate collapse of the early 1990s, was one of the hardest-hit developers in the recent downturn. Facing numerous defaults, he had to give up his most valuable holdings, including the General Motors building.
But now he's jumped back into the Manhattan real-estate scrum. His deals this year have included buying the debt on a stalled East Side development site and signing a contract to buy an apartment building with plans to convert it into condominiums. He submitted a bid last month to buy 737 Park Avenue, a 20-story prewar building, according to people familiar with the matter.
Now he is pushing forward with plans to build a modern skyscraper at Park Avenue and East 56th Street on what is widely considered to be one of the premier development sites in the country. Mr. Macklowe assembled most of the site before he went into a tailspin in 2008. Last year, CIM, a Los Angeles-based real-estate investment firm, took control of it after purchasing the $510 million of debt on the property.
But it's too early to know to what extent Mr. Macklowe will be able to revive his career. After his recent series of defaults, banks may be wary about lending money to him, and some of his current deals remain tentative.
Indeed, the project with CIM faces some hurdles. The developers still don't own two properties on the site, and without them it would be tricky to connect their building to 57th Street. Obtaining financing for new construction also remains difficult.
As part of his deal with CIM, Mr. Macklowe stayed involved in the project at the site of old Drake Hotel and he is playing an active role in the design and planning.
Mr. Macklowe in recent months has invited guests at his office in the General Motors Building to view a model of a 70-story tower for the site.
The model shows a mostly residential building with a small hotel and retail space. Full plans haven't yet been filed with the city Buildings Department.
Mr. Macklowe also recruited Mr. Viñoly. The Manhattan-based architect is well known for projects throughout the city, including Jazz at Lincoln Center, the West Quad building at Brooklyn College and the Bronx County Hall of Justice. He and Mr. Macklowe didn't respond to request for comments.
A CIM spokesman confirmed that Mr. Viñoly had been hired. He also said that the developers haven't yet chosen a final design.
CIM has declined to comment on Mr. Macklowe's exact role, or say whether Mr. Macklowe has any equity. But people who have spoken with him say Mr. Macklowe has a consulting position for which he's paid a fee and incentives.
The planning of the tower is moving forward at a time that private development is stirring in New York after hibernating for most of the downturn.
Still, Mr. Macklowe's efforts to rise from the ashes shows how powerful developers in New York City's clubby real-estate scene are able to attract new investors and rebuild even after their business has collapsed.
"He's a very smart and talented developer," says Prudential Douglas Elliman Chairman Howard Lorber, who is Mr. Macklowe's partner on one of his deals. "You always worry a bit" about teaming with people who got into trouble with lenders, "but in the last market, who didn't get killed?"
Mr. Macklowe gained notoriety in the 1980s when a crew working for him demolished several low-income apartment buildings on the site of a luxury hotel he wanted to build. They didn't have a proper permit and the demolition took place just hours before a city law went into effect that would have preserved the low-income housing. Later the hotel, named Hotel Macklowe, was one of the properties he lost in the 1990s.
Mr. Macklowe's first comeback was capped by his acquisition of the General Motors building for $1.4 billion. Many thought he overpaid, but he wound up greatly increasing the property's value by doing such things as signing Apple Inc. as a retail tenant and installing a glass cube as an entrance to its computer store.
Mr. Macklowe would have been fine if he had stopped then. But he kept buying at the top of the market.
Some of Mr. Macklowe's recent deals depend on his ability to raise additional money. For example, He signed a contract to pay $70 million for an apartment building at 150 E. 72nd St., according to people familiar with the matter. However Mr. Macklowe hasn't yet closed the deal, and he has hired an adviser, Howard Michaels of the Carlton Group, to help find financing.
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