Harry Macklowe wants to build an office tower near St. Patrick’s Cathedral

Materials show vision for 1M sf skyscraper, but without partner or many acquisitions

Jun.June 21, 2018 01:32 PM

Harry Macklowe and a rendering of the proposed office tower on East 51st and 52nd streets (Credit: Getty Images and Macklowe Properties)

At 81, Harry Macklowe appears to have at least one more supertall up his sleeve. He has been actively trying to assemble parcels for his next big undertaking: the ground-up construction of a massive, 1 million-square-foot office tower.

The property would be known as “Saint Stevens New York” and rise midblock along East 51st and 52nd streets, between Fifth and Madison Avenues, in Midtown’s Plaza District, according to Macklowe Properties materials obtained by The Real Deal. Over the past two years, Macklowe had been targeting a five-parcel site with the combined addresses of 5-9 East 51st Street and 12-20 East 52nd Street. Together, the properties offer about 280,000 square feet as of right, but the documents show Macklowe intends to build a structure more than triple the size.

The materials provide a loose framework for the project: ceiling heights of at least 15 feet, a grand entrance at least 30 feet high, and a “world-renowned designer.” The site has no height restrictions, allowing for a supertall if a developer so desired.

As part of his quest to acquire the properties and additional air rights, Macklowe has been hunting for an equity partner to back him on the project, sources said.

The 432 Park developer first hinted at plans for an office tower in a March 2017 interview with Bloomberg, but provided no additional details.

Macklowe is believed to have quietly begun stitching the assemblage together through acquisitions. In 2016, an entity shielded by lawyer Steven Holm acquired the property at 12 East 52nd Street for $32 million, records show. And, last month, another Holm-shielded entity entered contract to buy the parcel next door at 14 East 52nd Street from the owners of Spain-based bridal shop Pronovias for an undisclosed price, records show. The memorandum of contract indicates that the Pronovias deal will not close until 2019 — between April 30 and June 30.

Sources have identified the entity as affiliated with Macklowe, who has reportedly told brokers and the property owners that he already owns one of the parcels and is eyeing the rest.

The assemblage play may not be going entirely according to plan, however. Last year, he considered buying one of the properties next door, 11 East 51st Street, which is not identified in the documents as part of the assemblage. But Soho China, a part owner of the GM Building, acquired the landmarked building from Venezuela’s biggest bank, Mercantil Bank, for $30 million. Sources said Macklowe was among the bidders.

Each of the remaining parcels has a different owner – Noam Management, Trigon and the Consulate General of Venezuela. One of the property owners – who was approached by Macklowe and has no plans to sell – said he has seen him pacing near the buildings in the late afternoon in recent months.

Meanwhile, the developer is in the final stages of securing a roughly $850 million construction loan for his residential conversion of One Wall Street and spent last fall in a widely publicized trial over his $2 billion divorce. At the trial, he pegged his personal net worth at negative $400 million, mostly due to deferred capital gains from the $2.8 billion sale of the GM Building in 2008.

The assemblage site is located just east of the Olympic Tower condominium, west of the Feil Organization’s office building at 488 Madison Avenue, and directly south of St. Patrick’s Cathedral.

A Macklowe Properties spokesperson did not respond to requests for comment.

The church was one of the first property owners to sell its air rights following the city’s approval of the Midtown East rezoning, with a sale earlier this year to 405 Park Avenue owners MRP Realty and Deutsche Bank Asset Management. Macklowe’s would-be assemblage would not benefit from the 78-block rezoning because it does not extend east of Madison Avenue.

Macklowe’s ground-up office tower – depending on when it’s built – could face competition not only from SL Green Realty’s One Vanderbilt in Midtown, but also from Tishman Speyer’s the Spiral and Moinian Group’s 3 Hudson Boulevard in Hudson Yards and Silverstein Properties’ 2 World Trade Center in the Financial District.

Related Articles

Brookfield Asset Management CEO Bruce Flatt

“We underwrite every investment like we’re going to hit a recession”: Brookfield CEO

Cadre founder Ryan Williams and Allen Smith

Cadre brings on former Four Seasons CEO as president

AKS Capital Partners Managing Partners Aaron Appel and Walker & Dunlop CEO Willy Walker

Walker & Dunlop acquires Aaron Appel’s AKS Capital Partners

From left: Publisher and founder Amir Korangy, Editor-in-chief Stuart Elliott and VP of Corporate Development Yoav Barilan

TRD’s founders share war stories from over the years

As the years go by_A look back at 17 years of real estate history

A look back at 17 years of real estate history

250th Issue

The Real Deal celebrates 250 issues

Harry and Linda Macklowe (Credit: Getty Images, iStock)

The Macklowes’ massive art collection nears auction

Neir’s Tavern (Credit: Google Maps)

City’s oldest bar, of “Goodfellas” fame, gets last-minute lifeline