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Lam to develop Chelsea site after El-Gamal’s $60M deal falls through
Soho Properties was in contract for nearly two years amid delay in environmental cleanup
Jeffrey Lam’s Lam Generation is planning to build a hotel on a Chelsea site after a $60 million deal to sell it to Sharif El-Gamal fell through, sources told The Real Deal. The site is currently contaminated and has been undergoing a lengthy clean-up.
Lam is negotiating with architects and intends to file plans later this year for a development site at 113-117 West 24th Street it had been in contract to sell to El-Gamal’s Soho Properties for nearly two years. El-Gamal had entered contract in February 2015 to pay $60 million for the site, which offers 125,000 buildable square feet.
Sources familiar with the negotiations said a drawn-out environmental remediation process contributed to the deal falling through. The contract contained an “out” clause stipulating that, if remediation was not yet complete by late 2016, El-Gamal would receive his deposit back. Given that Lam could not deliver the site clean, El-Gamal, who was planning an unspecified commercial development, did not proceed with the deal.
Another source said El-Gamal had trouble securing financing. Representatives for the developer didn’t respond to requests for comment.
Lam Generation, led by Lam Group chief John Lam’s son Jeffrey, is now looking to carry out the project itself and may seek an equity partner, John said.
John Lam said the cleanup at the site is not yet complete, and so the company will focus on wrapping construction on its neighboring hotel project at 112-118 West 25th Street by year’s end.
Lam Generation is already developing a $120 million, 341-key Marriott International hotel on the other half of the site.
Lam has owned the 24th Street site since 2013, when it bought it from Gary Barnett’s Extell Development for $67.5 million. Lam bought up additional air rights, giving the site a total of 265,000 buildable square feet for two potential structures.
El-Gamal is developing a 43-story condominium tower at 45 Park Place, for which he secured a $219 million Sharia-compliant loan last year. He’s also seeking construction financing for a Dream Hotel at 560 Seventh Avenue in Times Square, which Soho is developing in partnership with MHP Real Estate Services.
Rich Bockmann contributed reporting.
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