Africa Israel to reduce NYT Building debt

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]