From the April issue: Before Maefield Development and a group of partners could start on their mixed-use megaproject branded as 20 Times Square, they had to defuse a ticking time bomb.
A handful of longstanding tenants occupied an L-shaped office building from the early 1900s, which was emblazoned with a big “Phantom of the Opera” sign. And the 11-story property at 701 Seventh Avenue would need to be completely vacated before the deed changed hands.
On one particularly stressful day in 2012, the developers were up against a deadline to submit a roughly $10 million deposit to extend their contract to buy the building while negotiating the buyouts of several tenants and signage interests. By that point, Maefield and its partners were hustling to get everything in order, said Etienne Locoh, the firm’s chief investment officer.
He recalled a feeling of anxiety as he walked into the Lincoln Square apartment of Maefield’s eccentric CEO, Mark Siffin, one morning.
Siffin, however, was fixated on an oil painting.
“I could tell he had been painting for a while. He was in the most peaceful state of mind,” said Locoh, who is also a managing partner of the New York-based Infinity Real Estate’s property investment arm, Infinity Urban Century. “In moments of high tension, he has an ability to be completely calm. The reason he’s so different is he’s actually comfortable being alone.”
Siffin — considered by some partners and business associates as the antithesis of a New York developer — is a bit of a mystery. The 67-year-old college dropout has worked as both a commodities trader and an artist, and at one point was reportedly on the radar of the Drug Enforcement Administration for cocaine trafficking, an allegation he denies.
But for close to three decades, Siffin has run his own real estate firm, which has evolved from homebuilding in the Midwest to co-developing hotel, retail and entertainment megaprojects in the center of Manhattan.
Maefield, which has offices in Indianapolis and Midtown, has acquired and built more than 5 million square feet of real estate around the country, including nearly 5,000 single-family and multifamily homes, according to the firm.
Now Siffin and his small team are deep into two complicated and time-consuming projects in the middle of Times Square: TSX Broadway with L&L Holding and Fortress Investment Group and the 20 Times Square tower with Fortress, Steve Witkoff and other partners.
The estimated cost of those projects is about $4 billion, according to sources and public records.
TSX is a redevelopment of the Palace Theatre and a hotel at 1568 Broadway into a 47-story, 550,000-square-foot tower with 663 hotel rooms and 110,000 square feet of retail space. Plans call for the landmark theater to be elevated 29 feet above its current location on Broadway. The project, which began in 2012, is expected to break ground this year.
Across the street, 20 Times Square is a ground-up development that dates back to 2010, when Maefield began seeking capital to purchase the site. The 39-story tower contains a 452-key Marriott Edition hotel and 76,000 square feet of retail, including NFL Experience and Hershey’s Chocolate World stores. Both towers will have massive LED billboard signs that span nearly 20,000 square feet apiece.
The completion of 20 Times Square this spring is timed with the closing of a massive buyout that will give Maefield and its equity partner Fortress total ownership. The two firms are buying out Witkoff and several other investors in a deal that values the property at $1.53 billion — one of the biggest investment-sales trades so far this year.
“I love Times Square. It’s the heart of New York City and the most important location in the U.S.” Siffin said in a recent interview at Maefield’s office in the Seagram Building, just northeast of the bustling tourist district.
The developer, wearing light blue jeans and a thick dark sweater, declined to comment on the specifics of either project, citing confidentiality agreements. Instead, he steered his responses back to what drew him to the area.
“Eighty percent of people who visit the city come to Times Square — it sends a message of who we are in the world,” Siffin said of the neighborhood, which was once overrun with porn shops, live sex shows and a rampant homeless population before a major rezoning took off in the 1990s under then-mayor Rudolph Giuliani.
Who is Siffin?
For a man whose career increasingly involves billboards, Siffin is perhaps the last person to advertise his own affairs. But news reports over the years and the developer’s conversation with The Real Deal shed light on his past lives and what drove him to real estate.
The view from Broadway and Seventh Avenue
He was born in Bloomington, Indiana, but grew up living in Bangkok and other parts of Southeast Asia in the 1950s and ‘60s. His father was a professor at Indiana University who specialized in Southeast Asian politics at the time.
Siffin moved back to the U.S. to attend Indiana for two years, then spent one year at art school in Philadelphia before dropping out and following his girlfriend to Paris.
After living in France as a poor artist for a few years, he reconnected with family friends who were missionaries in Burma and tried his hand at gem trading. Siffin used the profits to buy property in Hawaii and a farm outside Bloomington, where he lived with his wife and two daughters for a stretch in the late ‘70s.
He then moved to Europe and worked in derivatives trading in Florence, Italy, according to news reports. From there, Siffin landed a job as a global macro trader on the Chicago Mercantile Exchange. A spokesperson for the exchange said Siffin worked as a floor clerk from 1989 to 1996. During those years, he turned to real estate and launched Maefield Development, with a focus on retail and residential home development in the Midwest, in 1991 after his wife left him.
But a Miami Herald profile of the developer in 2006 cited DEA records that have since raised the question of other, illicit dealings in the 1970s and ’80s.
“Mark Siffin is suspected of being a major cocaine trafficker,” an unnamed Indianapolis DEA agent wrote in a report found in court records from 1978. “He appears to be funneling large amounts of money, in order to reinvest the funds in legitimate business areas.”
Siffin was indicted on drug charges twice — for unlawful possession and intent to distribute heroin in 1973 and for carrying more than 1,000 pounds of marijuana in 1982 — according to a report from corporate investigations consultancy Kroll on the City of Miami Beach’s official website.
He was convicted on the heroin charge and received probation, records show.
Siffin’s alleged drug activity became public years later, during a Nevada murder case. In a 2000 court opinion, he was identified as a possible suspect in drug dealing that led to the 1978 murder of a Reno judge’s son. Police reports said Siffin was closely involved with the slain man, who was also a drug dealer.
The developer, who was never arrested or charged in the slaying or drug trafficking, was working on a $300 million project in Los Angeles at the time of the court opinion, according to the Los Angeles Times.
Siffin told TRD that he received probation for the heroin charge, but called the other drug allegations “not true.”
“In the early ’70s, while I was in college, I did experiment with drugs,” he said. “It’s not something I am proud of.”
Measured steps
Sources close to the developer today described him as “Zen-like” and intensely passionate about a select few things. Siffin is a vegetarian and doesn’t drink alcohol or caffeine. These days, he also dedicates a lot of his time to painting.
“Mark is a lonely person,” Locoh said. “He has very few friends. These people who are geniuses are recluses in a way.”
Tim Tompkins of the Times Square Alliance said Siffin spoke about being an artist and painting in Central Park during a series of meetings in 2016, one of which took place at Siffin’s home.
“Not a lot of conversations with developers start with talking about painting,” Tompkins said.
With Siffin’s real estate deals, the advancements have also been measured, especially when it comes to larger investments. Maefield shifted to tackling large-scale projects in the 2000s in San Francisco, Miami and Los Angeles, as well as the Midwest.
The firm’s biggest developments to date include a 600-acre mixed-use project in Indianapolis, a three-block office-and-retail complex on Sunset Boulevard in L.A. and a string of shopping centers in Kansas City.
Today, Siffin employs a lean staff of 20, with just six based in Manhattan. His daughter Mae — whom the company is named after — worked as an executive at Maefield until last year, when she launched her own hotel development firm.
Siffin still has family in Indiana, where he keeps a home and visits a few times a year. But these days, he spends more of his time in New York to focus on the Times Square projects, he said.
While traveling between the Big Apple and Indianapolis for Maefield, the developer also runs an independent oil and gas subsidiary in Midland, Texas, as a side business. The company, MDC Texas Energy, owns 14,000 acres in the Permian Basin, one of the largest oil and gas fields in the world. MDC, which produces 12,000 barrels a day, is backed by Infinity Urban Century.
Infinity also invests in some of Maefield’s real estate projects, and in 2015, Locoh took on his dual role. He continues to spend a portion of each week — sometimes as much as 90 percent — providing analysis and consultation to Siffin. Locoh said he profits from the partnership but doesn’t receive a fee or payment for his services.
Although Infinity was an early player in the Times Square venture, it has since pulled out. The partnerships grew too crowded, Locoh said, and Siffin’s first backer in New York sold its stakes in the developments to Fortress and other investors.
“We like to operate without much fanfare,” Locoh said. “This was a very visible project. It got to be a busy kitchen, with multiple developers and capital partners.”
Sign of the Times
How well 20 Times Square and TSX Broadway do is anyone’s guess. But Siffin has seen projects fizzle out before.
In the mid-2000s, Maefield attempted to build a pair of 40-story billboards on 10 acres of land next to the Miami Herald. But in 2010, the McClatchy Company’s plans to sell the site to Siffin for $190 million fell through.
And when the market crashed in 2008, Maefield abandoned plans for 500 condos, 450,000 square feet of retail and several large billboards in Los Angeles’ Panorama City.
Times Square marked the next big step.
As the U.S. economy and prime real estate markets began to bounce back, Siffin set his sights on New York. He tapped his contacts in the LED billboard business in Los Angeles and began piecing together an assemblage at the corner of 47th Street and Seventh Avenue that included the turn-of-the-century office building and signage rights.
Maefield and Infinity pooled nearly $60 million in capital by 2012, but they still needed several hundred million to cover the acquisition and development costs for the site.
“Raising $600 million for something with no cash flow is near impossible,” Carlton Group’s Howard Michaels told the Wall Street Journal that year. (Carlton advised on the financing and took an equity stake in the project.)
Locoh said Siffin also cut a deal with Douglas Elliman’s Howard Lorber to capitalize the project. Lorber then brought in Witkoff, who brought in Michael Ashner’s Winthrop Realty Trust, and the partners purchased the site for $430 million in October 2012.
The acquisition got the project off the ground, and the group struck a deal with Marriott International and Ian Schrager’s Edition brand for the hotel space soon after.
But even with several parties helping Siffin, the process remained a hairy one due to the contract extensions and tenant and signage buyouts, including “The Phantom of the Opera.”
The project also hit several delays, including site complications, that required meetings with the Metropolitan Transportation Authority, Witkoff told the New York Post in 2016.
The partners finally broke ground in 2015, but as construction was nearing the home stretch and the developers considered tacking on a $1.1 billion refinancing, Siffin surprised everyone. He and Fortress proposed buying out all the remaining partners upon completion of the tower, based on “the realization that the other partners likely wanted to sell,” Locoh said.
Witkoff, Ashner and Michaels declined to comment, and Lorber did not return requests for comment.
Though Vornado and SL Green Realty had also eyeballed the Seventh Avenue site, Siffin’s small shop gained a major partner in Fortress. Siffin developed a close relationship with the asset manager’s New York executives Dean Dakolias and Ivan Yee, who agreed to provide substantial equity for the 1568 Broadway project as well.
“It’s not the usual four corners of the house, where people either have a ton of capital or [have] developed 30 buildings in NYC or have a big battleship behind them,” Locoh said. “To their credit, the guys at Fortress were smart enough to recognize both the power of the real estate and the power of the team around Mark to create the vision.”
Out of the box
While the Seventh Avenue project slowly moved forward, Siffin saw another opportunity across the street at 1568 Broadway. The property was home to the historic Palace Theatre and a 468-key DoubleTree Suites hotel.
Locoh recalled an August 2012 conversation in which Paul Boardman, Maefield’s head of urban real estate, said the property hadn’t been redeveloped because the theater was landmarked. To that Siffin replied, “Well, why don’t we just lift the theater?”
The idea, which at first seemed outlandish, panned out. Buying and developing the site came with its own set of hurdles and legal minefields, but Maefield ultimately got the green light from the city’s Landmarks Preservation Committee in November 2015.
A month later, Maefield bought out the leaseholder, California-based Sunstone Hotel Investors, for $536 million. The firm then negotiated a partnership with the ground-lease owner, the Nederlander Organization, which will continue to own and manage the theater. The deal also involved the buyouts of several rights of first refusal, including Hilton and Goldman Sachs.
Attorney Jay Neveloff of Kramer Levin, who represented the ground-lease owner, said Siffin and Boardman “came to Nederlander with a creative structure that created value.”
At one meeting — in an attempt to convince Nederlander executives that the theater would not be damaged in the redevelopment — Siffin used a shoe box to demonstrate how he planned to elevate the property, said Fried Frank’s Jonathan Mechanic, Maefield’s attorney on both projects. “That was an ‘aha!’ moment,” Mechanic said. “They understood what Mark was trying to do.”
With most of the hurdles cleared, Fortress and L&L joined the project last year and the trio bought the site’s hotel for $200 million. But while the TSX project has received at least $325 million from JPMorgan Chase so far, it still needs a lot more capital.
In January, the developers began hunting for a massive debt and equity package, including a $1.5 billion construction loan — a bold task at a time when lenders have notoriously cut back.
If Siffin and his partners succeed, though, the Times Square megaprojects could push the neighborhood, dominated by mid-market hotels, toward a pricier Las Vegas-style atmosphere.
“These are two high-end hotels and two very high-impact [billboards] in one of the most undeveloped sections of Times Square,” Tompkins said. “The projects stand to benefit from Siffin’s out-of-the-box thinking. An elevated theater, for example. Who’d a thunk?”