The Real Deal New York

Lloyd Goldman, Jeffrey Feil threaten to pull the plug on the New York Wheel

Partners said they are ready to abandon project after city denied request for tax-exempt bond issuance
September 21, 2018 09:45AM

Lloyd Goldman (left) and Jeffrey Feil (right) flying away from the New York Wheel as pigeons (Credit: Pixabay)

Investors Lloyd Goldman and Jeffrey Feil are ready to abandon their plans for Staten Island’s beleaguered New York Wheel.

The partners have said they are close to giving up on the project because the city will not support a tax-exempt bond issue for it, according to the Wall Street Journal. They have spent months trying to persuade officials to back a $380 million bond sale that would support the project, and unless the city changes its stance on this, they will sell the wheel parts that have already been built.

Lawsuits between the contractor and developers would likely resume as well, and problems would arise with the project’s EB-5 investors, who have put up more than $200 million in financing so far. If the wheel gets killed, it’ll mark one of the largest EB-5 failures to date.

The operating entity’s leadership has also been plagued with troubles. Most recently, Rich Marin left his post as CEO of NY Wheel in February. Prior to that, legal battles ensued when Meir Laufer, Plaza Capital Management’s CEO, and developer Eric Kaufman claimed some of the partners were attempting to dilute their ownership shares.

The New York City Economic Development Corporation said it still supports the project but does not think a bond issue would be enough to get it back on track.

The 630-foot tall observation wheel on Staten Island was first proposed in 2012 with a price tag of $450 million and an expected completion date of 2016. But it is still not finished, and its rough cost has since ballooned to about $900 million. Work at the project stopped last year, when contractor Mammoet-Starneth walked off the site.

The developers have since hired American Bridge Co. as a contractor, and four pedestals have already been built on the site. Amenities including a park and parking garage are finished or nearly finished as well.

“We don’t understand why the city would say no,” Goldman told the Journal. “It’s basically a cake that’s been mixed and readied and prepared for them. And it’s like: Don’t take it out of the oven.” [WSJ] – Eddie Small