Crain's New York Business

The high-profile office tower at 1500 Broadway can't pay its $335 million mortgage.

This year's bonuses will be biggest awarded since the pandemic.

A Manhattan community board rejected the zoning changes needed for the Related Cos. to build its Hudson Yards casino complex — a symbolic setback that points to the potentially fatal neighborhood opposition that the megaproject faces. In a 39-0 vote, Community Board 4 recommended that the city reject Related’s three-skyscraper proposal for the undeveloped western half of Hudson Yards, which would include a hotel, 1,500 apartments, offices, and a 2.7 million-square-foot casino. The developer is partnering with Wynn Resorts on the $12 billion project, and it has been seen as a leading contender for one of three casino licenses that the state will award at the end of 2025. But of the 11 known downstate casino proposals, Related’s is one of just four that must also secure city-level zoning changes in addition to surviving the onerous state licensing process. It is the first of those four to be rejected at the community board level — Steve Cohen’s Queens casino bid was approved by six Queens community boards last fall, while the proposals from Bally’s in the Bronx and Thor Equities at Coney Island have not yet faced votes. CB4 has railed against the casino plan because Related is trying to change the terms of the 2009 rezoning that paved the way for Hudson Yards. Under that deal, Related had committed to building much more housing — about 5,800 total units, albeit the same number of affordable homes — less office space and no casino. The new proposal also calls for taller buildings and a different layout, which has sparked a well-funded opposition campaign from the nonprofit that runs the adjacent High Line. Related’s bid is still very much alive and enjoys strong support from influential labor unions thanks to its promise to create 35,000 construction jobs and 5,000 permanent positions. But Related will need to persuade the City Council to approve the zoning changes in the coming months. The project, dubbed Hudson Yards West, would also include 5.6 acres of green space and a new public school, which was required under the 2009 rezoning. Read more: https://lnkd.in/e9ZyCht5

Tishman Speyer and a partner will collect nearly $1 billion in cash from The Spiral when the Hudson Yards tower’s mortgage is refinanced later this month. It’s an extraordinary return, considering The Spiral opened only three years ago. Tishman's windfall highlights why rival developers are eager to build new office towers, even as many buildings struggle to retain tenants and explore residential conversions. Success has many would-be imitators. RXR hopes to develop a new tower at 175 Park Ave. near Grand Central Terminal, and BXP would like to build around the block at 343 Madison, but both projects are on hold until they find anchor tenants. Vornado and Rudin Management have plans to build a new tower at 350 Park Ave. Related Cos., the primary developer of Hudson Yards, hopes to develop a casino and additional towers there. Since rising about a decade ago, Hudson Yards has lured financial institutions and law firms who like the tall floor-to-ceiling windows, column-free spaces, on-site parking, and elevators that can rise about 90 floors in 90 seconds. Average asking rents are $137 per square foot — double the average in Manhattan, according to Morningstar. Tishman Speyer entered the arena in 2014, acquiring the land beneath The Spiral and beginning development of the 66-story tower four years later. The total cost was $3.6 billion. By 2022, tenants such as Pfizer and HSBC had begun moving in. The building is now 94% leased, with Fitch Ratings reporting $200 million in annual net operating income. Read more: https://lnkd.in/ewfHx6Sf

Jacob Chetrit's holdings over the years have included the Sony Building, the Chelsea Hotel and the Willis Tower in Chicago.

Gov. Kathy Hochul is proposing Metro-North upgrades that could speed up commutes into the city, delivering travelers from the Hudson Line's farthest reaches to Grand Central in under 90 minutes. The plan calls for a bundle of rail infrastructure improvements between New York City and Poughkeepsie, including a second track at the Spuyten Duyvil station in the Bronx, signal and track enhancements at the Croton-Harmon station in Westchester County, and increasing capacity at the Poughkeepsie Yard. Hochul's office claims that, if implemented, these efforts would speed up commutes, without physically speeding up trains, by adding track and train capacity. Hochul’s office did not immediately share a price tag for the proposed investments, or where the funds would be drawn. The proposed upgrades uncoincidentally came the same day as the MTA’s congestion pricing launch, a move that’s especially unpopular with suburban travelers from counties surrounding the city and the outer boroughs. Read more: https://lnkd.in/gKMWgAQS

SL Green CEO Marc Holliday will be awarded a $10 million cash bonus if he can bring a casino to Times Square, the company disclosed in a New Year’s Eve regulatory filing. The payout underscores the massive business opportunity that a casino presents for Manhattan’s largest office landlord. It also indicates the high degree of uncertainty that SL Green will get permission from the state to convert a 54-story tower at 1515 Broadway into a casino hotel. Groups including Actors Equity, Laborers’ Local 79, and developer RFR have voiced their support for the Times Square casino bid put together by SL Green with Caesars Entertainment and Jay-Z’s Roc Nation. Opponents include the Broadway League and the owner of a Midtown office building who last month said he thought a casino would deter companies from renting Class A office space in the area. In addition, at least 10 rivals including The Related Cos., Silverstein Properties, Bally’s, Miriam Adelson’s Las Vegas Sands, and New York Mets owner Steve Cohen have their own casino bids. Applications are due in June, and state officials are expected to decide who gets the three downstate casino licenses by December. If a casino is approved for Times Square and hits certain performance targets, Holliday’s $10 million jackpot would meaningfully add to his personal bottom line. He was paid a total of $18.5 million in 2023, with nearly $16 million in shares instead of cash. He hasn’t been awarded a cash bonus of any sort since 2015, regulatory filings show. Read more: https://lnkd.in/e2MdE2dG

The disgraced actor is accused of defaulting on a $17 million loan for a townhouse on East 71st Street.

When Donald Trump and the Republicans swept control of Washington, the markets took it as a clear signal that 2017’s steep tax cuts would be extended before they sunset at the end of 2025. That would be an unbridled boon for wealthy New Yorkers who likely would have faced higher tax bills in a Harris administration. The corporate tax rate, cut to 21% in 2017, would have risen closer to its former 35% level. Earnings from partnerships, such as law firms or private equity shops, would have been taxed at higher rates, too. The expected extension would put more money into the pockets of wealthy New Yorkers. Fully 10% of New York households earn $300,000 a year or more, well above the 6% share of households that earn that much across the U.S., which suggests spending on apartments, restaurants, and luxury goods should grow considerably. In addition to extending the tax cuts, Trump has promised to expand them to exempt income taxes on tips and overtime pay — changes that would also boost the city’s lower-wage workers. More than 320,000 New Yorkers, 7% of the city’s workforce, are employed in food service or drinking establishments. Read more: https://lnkd.in/e2wVCdvP

The Tribeca penthouse is the type of New York home that would attract lingering looks on StreetEasy — fitting, since it’s owned by Michael A. Smith, the co-founder and former CEO of the real estate site. Now, the condo, which Smith expanded by adding additional stories, is being targeted for demolition by McDonald’s. In the lawsuit, submitted just before Thanksgiving, the fast-food giant claims that the Reade Street penthouse was built over roof space designated for HVAC equipment for a McDonald’s restaurant located around the corner. The company is seeking at least $10 million in damages and the restoration of the roof. Smith’s condo, which was expanded in 2007, now totals nearly 3,700 square feet of interior space, complete with four outdoor decks and a swimming pool, according to court filings. In 1987, the original five-story brick building at the site was included in a plan for a condo project that also encompasses nearby properties on Reade, Chambers and Greenwich streets. McDonald’s says it acquired four commercial units at the project in 1990 and negotiated several easements, including one that allowed the company to install a cooling tower on the roofs of the Reade Street properties. McDonald’s says it used that space until 2006, but that it never relinquished its rights and realized in 2012 that its Greenwich Street restaurant was having “serious HVAC problems.” According to McDonald’s, years of back-and-forth followed, during which its proposal to install HVAC equipment in the project's courtyard was “soundly rejected” by the condo board, which Smith led as president at the time. In 2021, McDonald’s says it informed the board that it was exercising its original easement, but a consulting engineer subsequently informed the company that the roof space was “no longer there” because a penthouse had been constructed on it. Smith's penthouse’s expansion has come under scrutiny before. In a 2021 action that’s ongoing, the condo board claims Smith abused his position as its former president to mislead fellow owners about his expansion. The board is asking for at least $5 million in damages. Read more: https://lnkd.in/eH3Tqghx