NY Post
VANTONE'S BACK FOR MORE
CHINESE REALTY FIRM WITH 'PAST' IN NEW BID FOR FREEDOM TOWER LEASE
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April 3, 2007 -- BEIJING Vantone, the Chinese real estate development company that walked away from two signed leases Downtown, says it's still serious about opening a "China Center" in Lower Manhattan.
China Center New York Executive Director Xue Ya acknowledged that "Our reputation has been hurt" by Vantone's pullouts from done deals at 7 World Trade Center last summer and at 195 Broadway last month.
But she pleaded for "understanding" and insisted the company had acted in good faith.
A brochure promoting its intended home at 7 WTC last year described it as "a dynamic hub for Chinese firms developing U.S. operations, and for U.S. companies wishing to conduct business in China." The center was to include an executive business club, conference center and travel center.
Vantone remains committed to that goal, Ya said - possibly at the top of the Freedom Tower, where besides being a tenant, "We want to participate in it," with the Port Authority, although she did not specify what sort of partnership she was referring to.
Real Estate and PA officials confirmed "serious" but "very preliminary" talks for about 400,000 square feet on the "iconic" tower's highest floors. PA spokesman John McCarthy said, "We'll need to be comfortable they demonstrate the financial capacity to move forward."
Vantone has a lotta 'splainin' to do after walk-aways from done deals left mud on its face. It made things awkward for two New Yorkers of unblemished reputations - Jones Lang LaSalle Regional President Peter Riguardi, Vantone's broker, and New York City Partnership President Kathryn Wylde, a strong advocate for Vantone's quest to launch a New York base.
Vantone thrust itself into Ground Zero politics by expressing interest in the Freedom Tower three years ago. When the project fell behind schedule, Vantone turned to 7 WTC, which was going up.
The company signed a term sheet with Larry Silverstein, a step that prompted then Gov. Pataki to prematurely stage a photo-op at the site.
The lease for the top five floors was later signed. But Silverstein cancelled the deal when he said Vantone "repeatedly" reneged on a $45 million letter of credit.
Ya says it was Silverstein's fault for rejecting the credit letter that Vantone ultimately produced. A spokesman for Silverstein said Vantone never produced the letter, but "wishes them the best."
Vantone claimed that Silverstein dumped the deal for 200,000 square feet when the market improved and found he could get $50-plus rents for 7 WTC, compared with the $45 Vantone would pay.
But no such case could be made at 195 Broadway nearby, owned by L&L Acquisitions' David W. Levinson and Robert T. Lapidus.
Vantone and L&L signed and counter-signed a lease for 120,000 square feet last month. Company Chairman Feng Lun flew in to sign it himself and promised the letter of credit - but again didn't deliver it.
Ya claims to have been surprised, too. In February, she was called back to China. Vantone's board "made a final business decision" not to go ahead, she said, because "Our Chinese bank had changed its conditions for the letter of credit." Levinson had no comment yesterday.
The timing of Vantone's exit there raises an impolite question.
Vantone wanted to be in the Freedom Tower from the start - because, Ya said, the Chinese expect offices to be in new, instantly identifiable buildings, and "It's very hard for Chinese people to recognize" older New York addresses as valuable.
Vantone turned to 7 WTC and 195 Broadway only when the ultra-tall tower's timetable became unpredictable.
Then, last month, Gov. Spitzer backed the Freedom Tower after predictions he would delay it again. The news broke on Feb. 21, the day after we reported on the broken lease at 195 Broadway.
But could Lun have known about Spitzer's intentions earlier than that? Would it have given Vantone reason to find a way out of the lease with L&L?
Asked those questions yesterday, Ya first said, "I think a very minor part," but then denied knowing about Spitzer's green-lighting the Freedom Tower "until I read it in the paper."
Riguardi said, "Having visited their developments in Beijing, I feel strongly this is an organization committed to New York. But like any prudent business, they have to make sure they make the right deal.
"A lot is involved in doing business between the U.S. and China and it's going to take time."
Wylde said, "the business relationship between New York and China is extremely important to the city's future, which is why we've supported Vantone's efforts to bring more Chinese companies here."
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