McSam sells Times Square hotel site for $59M

By Adam Pincus | July 25, 2008 01:46PM

Hotel developer Sam Chang sold a Times Square area parcel in the early stages of construction for $59 million, far above the $13.48 million the developer paid for the site in 2006.

The Rhode Island hotel development company Magna Hospitality Group bought the 74,000-square-foot site at 309 West 39th Street from the McSam Hotel Group on July 2, according to city records published today. It was at least the fifth hotel site Chang has sold to Magna since February.

The price difference was not all profit, however. Chang added value to the property through a zoning lot merger, a payment to the city for a bonus in development rights and approved plans for a 39-story hotel, city records show.

In June, 2007, Chang merged the 39th Street’s zoning lot with that of a neighboring parcel at 308 West 40th Street that was owned by a partnership partially controlled by McSam, which gave Chang an unspecified increase in development rights.

Also in June last year, Chang paid $6.3 million to the Hudson Yards District Improvement Fund, which allowed him to increase the building’s floor area ratio from 10 to 18, netting the site 59,250 more square feet, a city record showed.

The Department of Buildings’ Web site shows approved plans for the Gene Kaufman-designed hotel, one of six Chang had initiated on West 39th Street.

The other hotel sites Magna Hospitality bought from Chang this year include the 505-513 West 43rd Street for $42 million and 370 Canal Street for $83 million in February; and 60 West 36th Street and 231 East 43rd Street for a combined $40.22 million in March.

Chang and Magna were not immediately available for comment.