One of the Big Apple’s most ambitious projects of the decade is taking a sharp turn.
A group of Goldman Sachs-led lenders took control of the TSX Broadway project after developers Fortress Investment Group and L&L Holding Co., with others, failed to repay the loan when it came due, Bloomberg reported.
The lenders named SL Green Realty to take over management of the project, which could include preparation for a potential sale, people familiar with the matter told the outlet.
The 46-story tower sits on the corner of 47th Street in Times Square at 1568 Broadway. It includes 75,000 square feet of retail space and a 669-room hotel. There is also a Hilton-branded Tempo hotel and Palace Theatre.
But its pièce de résistance is a 4,000-square-foot stage hovering 30 feet above the street. According to architect Mancini Duffy’s website, the stage is tucked into a state-of-the-art exterior LED system that spans 18,000 square feet with broadcast and streaming capabilities and is Times Square’s largest transactional sign.
Goldman Sachs was the senior lender on the project when it began, providing a $1.1 billion construction loan in 2018.
The developers got another $100 million in EB-5 funding in 2020, which represented only about 4 percent of its overall budget at the time.
Masa Son’s SoftBank Group also invested around $200 million early in the project’s development.
There were already signs of trouble this time last summer when the borrowers failed to repay their $543 million mezzanine loan, The Real Deal previously reported.
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Their lender, Nick Mastroianni’s U.S. Immigration Fund, granted an extension. But the loan needed to be reworked, and according to a person familiar with the matter, Mastroianni was looking to either sell the debt outright or bring in a new partner.
The project, which began construction in January 2019 and was expected to open in 2023, was reported completed in June.
— Christina Previte