Ross settles for $28M profit at Moinian tower

January 31, 2011 09:08AM

Stephen Ross and 3 Columbus Circle

Joseph Moinian has struck a deal to retain control of his 26-story office tower at 3 Columbus Circle, fending off a hostile takeover by developer Stephen Ross and his Related Companies, the Wall Street Journal reported.

Ross had purchased the $250 million defaulted mortgage on the project last summer, planning to wrest control through a foreclosure before demolishing the existing structure and building a Nordstrom department store beneath luxury condominiums. But late last week, Moinian, with the help of SL Green Realty, paid off Ross to the tune of $278 million, taking back the mortgage and putting an end to the clash.

Moinian has already spent roughly $100 million in renovations to the glassy, 700,000-square-foot building, now valued at around $500 million as a result of the deal. SL Green, which put $130 million in equity into the building as part of the deal, will own slightly less than half of it.

In an interview with the New York Times, Ross said he was “disappointed” despite the profit on his initial investment. “It certainly isn’t what I envisioned. New York loses jobs and a major development by this,” he said. “It’s an ugly building. You can’t create a silk purse from this sow’s ear. It’s unfortunate for his creditors.”

Ross said he had offered Moinian $150 million to Walk Away From The Building And Their Heated Court battle, but Moinian retorted by asking Ross whether he could buy the nearby Time Warner Center and demolish it.

[WSJ] and [NYT]