The show must go on for Gary Barnett’s $186 million assemblage in the Theatre District.
The developer recently dropped $82 million to secure two elements essential for the planned mixed-use megaproject in the neighborhood to move forward. For that sum, Barnett’s firm Extell Development received two lots at the corner of Eighth Avenue and West 46th Street and a sweeping package of development rights from the Shubert Organization, Broadway’s biggest landlord.
Extell paid $31 million for the two properties at 738 and 740 Eighth Avenue and $51 million for the development rights, records show.
The two transactions, which both closed on July 30, mean Barnett’s development site along 8th Avenue between West 45 and 46th Streets comprises approximately 33,000 square feet with 330,793 square feet of floor area development rights, according to a publicly filed development agreement. With air rights, the development is expected to rise to over 500,000 square feet.
Extell’s lots at Eighth Avenue and West 46th Street, highlighted in red
Extell also closed on a $65 million loan from lender JPM EX Portfolio Seller LLC, an entity affiliated with the developer.
The deal expands Extell’s assemblage on the block to 11 lots, most of which are already vacant. Records show the developer has spent at least $186 million, including the transactions with Shubert, piecing together the site since 2014.
The site is not a blank slate. There are three buildings with 205 feet of frontage along 8th Avenue that Extell doesn’t own. However, the roughly 3,800-square-foot obstacle that the buildings represent will not delay the project, according to Barnett. Though it’s not clear exactly what the developer will build, work is moving ahead.
“It’s going to be mixed-use,” said Barnett. “[We] hope to break ground in the next year.”
Provisions in the development agreement between Extell and Shubert require Extell to halt construction during shows at the nearby Imperial Theatre, which is owned by Shubert. The theater landlord did not respond to a request for comment.
It’s been an active summer for Extell. Closings are underway at Central Park Tower, One57 is nearly sold out and the developer just inked a $50 million ground lease for a lot near Columbus Circle.
Meanwhile, on the Upper East Side, Extell is waging a war on two fronts at its development site on First Avenue between East 85th and East 86th streets. On one side are the notorious Podolsky brothers, who own a mid-block building, and on the other, the Division of Homes and Community Renewal, which is blocking the expulsion of the lone remaining residential tenant until Extell reveals its building plans. The developer is fighting the agency in court.
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