The Real Deal New York

NY Wheel dials back opening to 2018

Delay is latest snag amid cost overruns, infighting among developers
August 18, 2016 11:45AM

New York Wheel investors Rich Marin, Joe Nakash, Jay Anderson and Lloyd Goldman

Tourists hoping to ride the New York Wheel are now being told to … wait for it … wait for it …

Developers of the 630-foot tourist attraction on the Staten Island waterfront have pushed opening day back to April 2018, according to “We wanted to have this open for the 2017 season and we’re not able to,” CEO Rich Marin said. “It was more complicated in the engineering process, and fabrication was simply more complex than we were led to believe.”

Construction of the $580 million wheel started in May, and Marin said the next phase is building the Wheel itself. “Sometimes people wonder if I’m being too optimistic, but it’s my job to be optimistic,” said Marin.

That’s no small feat given the delays and infighting over the project.

Costs have ballooned from early estimates of $250 million, and critics say revenue projections are out of touch with reality.

Developers projected first-year pre-tax revenues of an astounding $127.85 million in 2017, more than the Empire State Building’s 2014 revenue of $111.5 million, The Real Deal previously reported. Revenues from the 630-foot-tall wheel could reach $166.52 million by 2021.

Since 2015, the project’s investors have battled each other in court after Wheel Estate LLC — an entity controlled by majority investors Lloyd Goldman, Joseph Nakash, Andrew Ratner and Jay Anderson — asked a judge to reduce the ownership of investors Meir Laufer and Eric Kaufman.

In January, Laufer, who had the original idea for the project, filed for an injunction to prevent the investors from ousting him from the board. And in a counterclaim filed by Kaufman, Kaufman accused New York Wheel CEO Rich Marin of being responsible for the project’s cost overruns[SI Advance] — E.B. Solomont