From left: former New York Times building at 229 West 43rd Street; Richard Marin, CEO
of Africa-Israel; and the Clock Tower

Africa-Israel USA is negotiating with less than six management companies about running the hotel portion of the former New York Times building at 229 West 43rd Street and hopes to choose one next month, said Richard Marin, the company’s CEO. The company is also working to secure financing so it can redevelop the Clock Tower — formerly the Met Life headquarters — on Madison Square Park, into more down-scale condos, a different project than the more upscale model the company proposed in 2007, Crain’s reported. Before the recession hit in 2007, Africa-Israel was one of the most prodigious buyers of high-profile properties, purchasing the former New York Times Building, the Apthorp complex on the Upper West Side and the Clock Tower. But since the recession, the company has run into problems with its holdings. As part of its efforts to redesign its projects, Africa-Israel hired Peter Rosenberg as managing director of development. The Clock Tower will be among the projects he’ll supervise. [Crain's]

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The seven floors up for grabs at the old New York Times headquarters at 229 West 43rd Street are expected to draw about a dozen bids by today’s submission deadline, which was extended by a week due to increased interest, Crain’s reported. The plan to convert the space into a 400-room hotel will be part of an ongoing effort to transform the former office building into a mixed-used property that will include condos, restaurants and stores. More than 70 hotel operators had previously expressed interest in operating the Times Square property, according to Richard Marin, chairman and CEO of building owner Africa Israel Investments USA. Experts say the location would be ideal for anything except a super-luxury or down-market operator. According to Jon Fox, a hotel consultant at PKF Consulting, Africa Israel wouldn’t want a limited-service or budget hotel since that would be incompatible with its own plans to develop high-end condos at the top of the building. Africa Israel bought the 79,000-square-foot, 15-floor building for $525 million in 2007 and tried unsuccessfully to attract office tenants to the building before opting to reposition it. More than 60 percent of the lower levels has already been leased out to retailers. [Crain's]

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Africa Israel Investments has set a deadline of mid-August for bids on a new high-end hotel in the former New York Times building in Times Square, which it hopes to open by 2012, Crain’s reported. The company, which spent $200 million to completely gut the long-vacant property at 229 West 43rd Street, between Seventh and Eighth avenues, said it has received more than 70 inquiries from hotel operators looking to buy the seven floors that will be designated as hotel space in the iconic building, which once housed the Times’ printing presses and offices. Above the hotel, AFI plans to convert the top four floors — including the former boardroom — into luxury condominiums. Neal Golden and Jimmy Kuhn of Newmark Knight Frank are marketing the hotel space, and meanwhile, Robert K. Futterman is working on finding tenants for the remaining 40 percent of the retail space on the building’s lower levels, which AFI hopes will be leased up by the end of the year. [Crain's]

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From left: Robert Futterman and 229 West 43rd Street; Chase Welles and East River Plaza; and Jedd Nero and 798 11th Avenue

The Real Estate Board of New York announced the nine contenders for its “Retail Deal of the Year” awards today, a competition that honors ingenious and influential real estate transactions (click here to see the full list of contenders). Included in the list was the controversial deal at the Times Square building at 229 West 43rd Street, through which retail brokerage Lansco claims it was cheated out of a $1 million commission. Robert Futterman of the eponymous firm represented the property owner, Africa Israel, in the deal and was named in the nomination. Other top deals submitted included the Costco lease at East River Plaza at 521 East 116th Street and the Volkswagen Group lease at 798 Eleventh Avenue.
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From left: Lon Rubackin, Lev Leviev, Robert Futterman and Bowlmor’s new home at 229 West 43rd Street

An influential Manhattan retail brokerage, Lansco, claims it was cheated out of at least $1 million in commissions for arranging one of last year’s high-profile commercial deals, the 20-year lease by Bowlmor at the former New York Times Building in Times Square. Lansco alleges competitor GFI Capital Resources Group and Bowlmor’s parent company Strike Holdings conspired to cut it out of the deal for two floors at 229 West 43rd Street, which Lansco says was worth between $3 million and $4 million per year. The charges were leveled in a lawsuit Lansco filed April 28 in New York State Supreme Court against GFI and Strike Holdings, seeking at least $1 million as well as rights under renewal and extension clauses. “Strike and GFI conspired with each other to interfere with Lansco’s right to be the broker,” the suit says. The court papers do not provide a reason why Lansco was replaced. [more]

A German bank claims the developers of the year-old, sleek, 21-story Cooper Square Hotel in the East Village are in default on $52 million in loans, at the same time the building owes millions to contractors.

Not only is the project in financial distress, but developers and investors in the 145-room hotel at 25 Cooper Square at East 5th Street could owe as much as $6 million in personal guarantees, the recent lawsuit says.

Commercial lender WestLB filed to foreclose on $52 million in loans given to Cooper Square Hotel, Cooper Square Mezz Lender and seven individuals including the hotel’s co-developer Matthew Moss and real estate investor Kyle Ransford, a lawsuit filed Dec. 14 in New York State Supreme Court says.

In addition, at least 20 contractors have filed mechanic’s liens totaling $9.9 million on the project between June 2009 and Dec. 18, records from the New York County Clerk show. The largest single lien, for $5.8 million, was filed by contractor F.J. Sciame Construction on Aug. 21, the records show.

Moss, Ransford and investor Gregory Peck are in default on a completion guarantee, and collectively owe up to $6 million, in part because of the unpaid liens, the suit says. [more]

Africa Israel Investments said today it will cut its debt on the 15-story New York Times Building at 229 West 43rd Street by roughly 60 percent after reaching a deal with its creditors. The developer paid $525 million for the Manhattan property in 2007, taking out $715 million in loans in order to convert the building, where its namesake newspaper was headquartered until 2004, into a mixed-use complex including an upscale hotel, apartments and retail space. The building now stands empty after the economy cratered and the project was abandoned. Africa Israel’s debt stood at $652 million on the property prior to the deal, which will reduce it to $267 million, and provide the company with a credit line of $75 million. The deal stipulates that Africa Israel surrender 50 percent of its rights to the building. The company said it will use another $25 million to develop the property and will pay back the remaining debt within five years. Yesterday, the company reached a deal with its corporate bondholders to restructure $2 billion in debt, which is pending final approval next month. [WSJ]

From the October issue: As the real estate industry scrambles to unwind billions of dollars in
distressed inventory, a number of high-profile deals are stuck in
neutral as lenders battle it out with each other to see who will get
paid and who will be left holding the (empty) bag. While creditors often turn on each other during a workout, the massive
number of securitized loans with multiple lenders and third-party
servicing firms managing the funds is creating a level of complexity
that may take years to sort out, analysts said. Unlike the previous downturn in the 1990s, the majority of large deals
during the recent real estate boom were made using securitized loans –
or at least loans with large syndicates, or groups of lenders sharing
the burden of a single loan.

Bowlmor negotiating lease at 229 West 43rd Street

Bowling alley Bowlmor Lanes is in the process of leasing 70,000 square
feet at 229 West 43rd Street, the New York Post reported. If the
bowling alley comes to the building, which is the former home of the
New York Times, there will be three bowling alleys in Times Square.
Bowlmor reportedly scouted other Times Square locations, including 1540
Broadway. The former Times building has no commercial office tenants,
and its only current tenant is Discovery Times Square, which has some
of the building’s ground floor and lower-level retail space. [more]