Vornado Realty Trust is telling brokers to expect a much more modest renovation to the Midtown tower that would see it continue to operate as an office building, three people familiar with the property told Bloomberg.
The notoriously press-shy Roth is probably leaking the news in order to dissuade any potential lenders or investors who are still interested in Kushner’s ambitious plan to redevelop the property, three people familiar with the Vornado head told Bloomberg.
A new deal with lenders could result in Kushner losing control of the property, Bloomberg reported.
A spokesperson for Kushner said they still haven’t decided what to do with the building, which is losing money.
“As equal partners, Vornado and Kushner have been exploring a range of options for the future of 666 Fifth Avenue,” the spokesperson said. “All options are still being assessed, and no decision has been made about which option to pursue. Any implication that an agreed upon path has been reached or that there is contemplation of an outcome that would be to the sole benefit of one party over the other would simply be wrong.”
Kushner had proposed redeveloping the property into a vertical mall with a hotel and residential condos, with one projection valuing a remade 666 Fifth at $12 billion. The company, formerly headed by Jared Kushner, sought well-capitalized partners around the globe, including Anbang Insurance Group, in a deal that would have provided Kushner a $400 million windfall. Negotiations collapsed amid scrutiny.
A $1.2 billion mortgage on the property is coming due in February 2019, and Vornado’s and Kushners’ business plans are heading in different directions. After selling off Vornado’s Washington properties, Roth is focusing on operating the real estate investment trust’s Manhattan portfolio.
Kushner, meanwhile, is taking on more expensive redevelopment projects like Dumbo Heights. Any decisions on refinancing would not happen on equal footing, Bloomberg reported. [Bloomberg] – Rich Bockmann