Theater company Reading International and an Upper East Side neighbor are revisiting long-stalled talks about collaborating to develop their properties across the street from Bloomingdales.
The Los Angeles-based public company is back in discussions with the owner of a walkup at the corner of 60th Street and 3rd Avenue who had previously rebuffed offers to fold his property into the firm’s redevelopment of its Cinemas 1, 2, 3 site.
“We are evaluating the potential to redevelop the property as a mixed use retail and residential and/or hotel property,” the company wrote last week as it announced its third-quarter earnings.
Reading has been embroiled in a leadership struggle since CEO James Cotter Sr. died last year.
The theater, which sits mid-block at 1001 3rd Avenue, and the four-story walkup next door at the corner could be combined for a total of 94,120 buildable square feet. An extra 15,000 square feet of air rights may also be available.
Reading’s previous renderings for the project showed a new building only on the Cinemas 1, 2, 3 site. But in a presentation at the company’s annual meeting Monday, Reading unveiled a rendering for a glass tower covering both sites at the corner.
Cotter, Sr. and the walkup’s owner, Nick Pashalis, had been in talks over the development for a number of years. But the two became bitterly divided and Reading was ready to go ahead with the development on its own, said investor Andrew Shapiro, whose Lawndale Capital Management owns a large stake in the company’s non-voting stock.
“[The discussions] went nowhere so Reading was firing up the coal in the train and ready to leave the station,” he said.
Since Cotter Sr.’s passing, the parties are more willing to hammer out a deal, Shapiro said.
Reading’s third-quarter filing noted that prices in the area have been reported at more than $1,000 per buildable square foot. The Real Deal reported that Kuafu Properties paid $1,100 per buildable square foot for a development site just one block west.
Cotter’s children have been fighting over control of the company since he died a year ago. Adding to the tumult, activist investor and Dallas Mavericks owner Mark Cuban, who owns the competing Landmark Theatres chain, called on the company to evaluate its corporate governance and board composition. Reading’s management refused the request.
Reading appointed Cotter’s daughter, Ellen Cotter, as interim CEO in June, and Shapiro said Pashalis is probably more willing to negotiate with the new leadership.
The boost in land prices since talks last broke down, he added, may have also been a factor in getting Pashalis back to the negotiating table.