The owner of the Flat Iron is still interested in purchasing the
Subway Block next door, but, apparently, the building is in such a desperate state that it is almost not worthwhile making the necessary repairs to bring it up to code. This situation has been exacerbated by the fact the Heritage Conservation Board is placing unreasonable restrictions on what he wants to do to the building. He is very frustrated (info from a reliable intermediary source).
This is very sad. The Subway Block deserved to be saved as well, and, in many ways, the Subway Block and the Flat Iron Building go together like shoes and socks. They complement each other extremely well and belong together.
Hopefully the proponent will not back out, and some reasonable accommodation can be made with the heritage people.