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New York

Price war: Partners at MoMA tower went to arbitration over unit discounts

Hines wanted more leeway to slash prices amid market slump

From left: Kwee Liong Keng, 53 West 53rd Street, and Gerald Hines (Credit: Google Plus and Leading Voices Podcast)
From left: Kwee Liong Keng, 53 West 53rd Street, and Gerald Hines (Credit: Google Plus and Leading Voices Podcast)

Facing poor sales and an oversaturated market, the partners behind the ultra-luxury MoMA tower have had trouble agreeing on how much to cut prices.

Hines, Goldman Sachs, and Singapore’s Pontiac Land Group recently resorted to an arbitration process to resolve their differences, sources told Crain’s, with Hines seeking to slash prices more aggressively at the Jean Nouvel-designed tower at 53 West 53rd Street.

Spokespeople for the project, Goldman and Pontiac declined to comment.

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The 1,050-foot condo building has seen price cuts totaling about $167 million since hitting the market almost four years ago. The tower’s projected sellout, initially pegged at more than $2.14 billion, is now under $1.98 billion according to disclosures filed with the state Attorney General’s office. Closings are set to begin in the spring, according to a project spokesperson.

In addition to a general slump in the city’s super-luxury market, observers have also pointed to specific issues with the tower’s design as a reason for slow sales. Structural columns in the building’s facade impede views from many of its windows.

“I commend the developer for wanting to build something so artistic, but I’m not so sure of its market viability,” Donna Olshan of Olshan Realty told Crain’s.

The tower, located next door to the Museum of Modern Art, will include one of the museum’s galleries in its base as part of the museum’s expansion. The final stage of that expansion will see the museum closed for four months this year, from June to October. [Crain’s] — Kevin Sun