The Real Deal New York

Hyatt New York to be demolished to make way for 2M sf tower

Project is latest to take advantage of Midtown East rezoning
February 07, 2019 05:00PM

From left: Grand Hyatt New York at 109 East 42nd Street, TF Cornerstone’s Frederick Elghanayan, and MSD Capital’s Michael Dell (Credit: Google Maps)

Another tower is coming down in Midtown East — this time it’s Donald Trump’s first development.

TF Cornerstone and MSD Partners, which controls the assets of Dell Technologies founder Michael Dell and his family, plan to demolish the Grand Hyatt New York to make way for a new 2 million square foot office tower, the Wall Street Journal reported. TF Cornerstone and MSD plan to take over Hyatt’s lease, which expires in 2077 and would require city and state approval since the land is owned by the Empire State Development Corp.

The hotel was Trump’s first major development project in Manhattan. He sold his interest in the property in 1996. The new tower would include office and retail space, as well as a smaller version of the hotel.

The project would be the latest to take advantage of the Midtown East rezoning, which officials hope will add 6.5 million square feet of new office space to the neighborhood. JPMorgan Chase’s headquarters at 270 Park Avenue was the first. At the Hyatt, developers plan to use air rights purchased from Grand Central Terminal to build a larger tower. In 2016, MSD and TF Cornerstone bought a 90 percent stake in 1.35 million square feet of air rights tied to the terminal for $126 million. The partners sold 660,000 square feet to JPMorgan in December.

TF Cornerstone is already working on a $925 million megaproject in Long Island City, and recently took over two sites at Pacific Park. [WSJ] — Kathryn Brenzel