Vornado Realty Trust

In case there was any doubt, Steve Roth and Steve Ross really want Madison Square Garden to move.

This morning, some 13 weeks after Madison Square Garden announced it was renovating and staying in place (i.e. not moving), the developer duo professed, once again, their eagerness to see the Paterson administration pick up the ball and move forward with the large-scale Moynihan Station plan. The plan, in its most recent iteration, would involve the state using Port Authority money intended for regional transportation projects to buy the Garden and its air rights from the Dolan family—that is, if they’re willing to sell (the Dolans have expressed no interest and are moving forward with the renovation).  read more »

West 57th Street is to its easterly counterpart what a deer-hunting, RV-driving homeowner is to his McMansion-owning neighbor—an embarrassment.  read more »

Joe O's, the casual sports bar and restaurant in the Hotel Pennsylvania and home to the $13 Vornado pizza -- presumably, an ass-kissing tribute to hotel landlord Steve Roth's ginormous real estate company -- has been shuttered.

Its windows along West 33rd Street have been blacked out, with only a sign hanging from the outside scaffolding to remind passersby of its former presence.  read more »

After months of talk about demolishing the historic Hotel Pennsylvania to make way for a soaring office tower, landlord Vornado Realty Trust has acknowledged that it might just hang on to the McKim, Mead & White-designed, Dave Barry-panned, so-called "World's Most Popular Hotel," after all.

"First off, it is doing damn well as a hotel," Vornado CEO Steven Roth said Tuesday during a conference call with investors.

Indeed, the 1,700-room lodge that Vornado previously described as "a placeholder, sort of like a parking lot," brought in nearly $38 million in 2007, as The Observer earlier reported. (That's $10.5 million more than in 2006.)

Imagine how much the run-down hotel might make after a significant renovation, which Vornado is now apparently considering.  read more »

Vornado Realty Trust CEO Steve Roth told investors Tuesday that he wants to redo Penn Station in a scaled-back version of the grand Moynihan Station plan, moving Madison Square Garden’s WaMu theater out of the arena structure to make way for a large train station entrance hall.

Despite a push by Vornado and co-developer Related Companies to keep the larger-scale project alive via government support, Mr. Roth indicated he considers that scenario unlikely.

“[We] basically feel that something good is going to happen,” he said. “Either that the governments are going to get their acts together, which they probably will not, or ... we have with Madison Square Garden a Plan B, which is they stay where they are, we take out the theater, we—underneath the seating bowl of the arena—put a new grand entrance to Eighth Avenue and a new grand entrance to the station on Seventh Avenue, and what that will do is create a grand train station. Not quite as grand as moving it, but pretty nice. Actually, spectacularly nice.”  read more »

When Madison Square Garden unceremoniously announced on March 27, via late-afternoon calls to reporters, that it was moving forward on a renovation of its arena, it seemed to be the death blow to the planned redevelopment of Pennsylvania Station and the surrounding area. The Garden, led by chairman James Dolan, was exhausted with the lack of progress in a slow-moving, state-led plan to remake and expand the station, to be called Moynihan Station, which required the Garden’s moving to a new arena in the neighboring Farley Post Office.  read more »

Now it's really official: the M.T.A. board this afternoon voted to approve a deal with the Related Companies and Goldman Sachs to develop over the 26-acre West Side rail yards.

A few nuggets of rail yards info from the meeting: According to M.T.A. CFO Gary Dellaverson, who summarized negotiations to the board, the key to the Related Companies' victory was its willingness to literally pick up the $1.054 billion Tishman Speyer deal and sign it, only inserting one notable change.  read more »

One of the remaining bidders for the West Side rail yards, a team of the Durst Organizaiton and Vornado Realty Trust, said it is expecting that S.I. Newhouse’s Condé Nast will remain part of its bid as an anchor tenant.

“We expect that Condé would be our partner,” said Durst spokesman Jordan Barowitz.

However, Condé, which began a new search for space after Tishman Speyer was named the winner over the Durst/Vornado team in March, did not make clear its plans, as a company spokeswoman, Maury Perl, declined comment.  read more »

With Tishman Speyer out of the picture at the West Side rail yards, the Metropolitan Transportation Authority is now headed back to the other three bidding teams (Extell Development, the Related Companies, and a joint venture of the Durst Organization and Vornado Realty Trust); that is, if they’re still interested.

The apparent frontrunner, given that it was the runner-up to Tishman in the original bidding, would be Durst/Vornado, the only remaining team in late March with an anchor tenant, S.I. Newhouse’s Condé Nast. If Condé Nast is no longer on board with a move—The Times has reported that Tishman failed to woo them in recent weeks—that could mean trouble for the Durst/Vornado bid, or certainly the value of it.  read more »

No one ever said planning for a train station was cheap.

In a recent filing with the SEC, Vornado Realty Trust wrote off $23 million associated with the “abandonment” of the so-called Moynihan East portion of the Penn Station redevelopment plan.

Taken with planning for the expansion of the station into the Farley Post Office across the street, Vornado, led by Steve Roth, has spent $34.2 million, according to the filing:

The three months ended March 31, 2008 includes a $34,200,000 write-off for our share of two joint ventures’ pre-development costs, of which $23,000,000 represents our 50% share of costs in connection with the abandonment of the “arena move”/Moynihan East portions of the Farley project.

Given that Vornado is in a 50/50 partnership with the Related Companies for the project, the numbers reported by Vornado suggest that the two companies have spent nearly $70 million on the project since they were designated developers in 2005!  read more »

High-powered law firm Paul, Weiss, Rifkind, Wharton & Garrison is in negotiations with Vornado Realty Trust for more than one-third of the tower planned for atop the Port Authority bus station, a move that, if cemented, would extend the legal establishment’s apparently inexorable drift westward from the white-shoe stronghold of midtown.

A source close to the negotiations confirmed that Paul, Weiss is in serious, though early, negotiations to take 500,000 square feet in the middle of the 42-story building slated to rise from a platform atop the seedy bus terminal.  read more »

At least two former Manhattan Mall retailers have sued landlord Steve Roth's Vornado Realty Trust over their recent evictions from the mall to make way for a new 150,000-square-foot J.C. Penney department store.

Proprietors of Pretzel Time and Square One Shoes & Clothing each claim in separate lawsuits that their leases were prematurely and illegally terminated last month.  read more »

Developers Vornado Realty Trust and the Related Companies are grasping for options to keep alive a multibillion dollar redo of Penn Station and related real estate development, as they have asked the city and state to back a loan to build a new Madison Square Garden in the Farley Post Office across Eight Avenue.

The proposal is intended to lure the Garden back to the table, as the company, led by Chairman James Dolan, pulled out of the larger plan in March. The state is considering the offer as one of many options for the project, a state official confirmed.

In this option, the state and city could be saddled with the cost of the arena—said to be in the range of $900 million to $1 billion—should the larger redo of Penn Station ultimately fall apart.  read more »

The folks at the city's Economic Development Corporation sent over the above rendering of the West Side trade show facility we wrote about yesterday. A Vornado Realty Trust subsidiary submitted a winning bid to expand the existing facility, located at Pier 94.

Vornado Realty Trust, led by CEO Steve Roth, has been selected to develop an expanded trade show facility on the far West Side, expanding a modest convention center on Pier 94 into Pier 92.

For Mr. Roth, who recently was inched out by Jerry Speyer in a bid to develop the West Side rail yards, the project is a moderately-sized fish (the project will cost about $100 million, according to the city’s Economic Development Corp.), as opposed to the “elephant” that he’s been looking for (in his letter to investors [PDF] a few weeks back, he wrote that Vornado was “always elephant hunting and this year we missed a few.”)  read more »

With Merrill Lynch staying put downtown and plans to redevelop Penn Station in flux, Vornado CEO Steven Roth may not know what to do with the Hotel Pennsylvania--a building the company once described as "a placeholder, sort of like a parking lot."

In the meantime, the historic lodge continues to make his company some big bucks--netting roughly $37.9 million last year.

That's $10.6 million more than in 2006, according to the company's latest filing with federal regulators, which further added, "This property continues to trend higher in 2008."

With revenues on the rise, does it still make sense to raze it?  read more »

News yesterday that Madison Square Garden's owner, the Dolan family, will renovate instead of moving across the street to the Farley Post Office seemed to doom the planned Moynihan Station, but the head of the project said today he thinks the family's decision "isn't irrevocable."

"We just need a lot of strong public leadership to get to the point where, you know, [the Dolans] see the project as a potential reality," Vishaan Chakrabarti, president of the Moynihan Station Venture (a team of the Related Companies and Vornado Realty Trust) said at a real estate luncheon today. The $14 billion Moynihan project would create a new transit hub to replace the aging Pennsylvania Station.  read more »

Tishman Speyer appears to be in the pole position going into the final stretch of the West Side rail yards saga, as the Metropolitan Transportation Authority, as of this morning, was still negotiating with the firm to hammer out an agreement before Wednesday’s MTA board meeting, according to three people familiar with the talks.  read more »

Late last week, we put up a post about how the Bloomberg administration agreed to exempt a Vornado RealtyTrust-owned site in Harlem from a new height limit to be established on 125th Street as part of a rezoning of the area. The City Council is expected to follow suit.

Getting to such a point, where Vornado would build its 600,000-square-foot Harlem Park office tower at Park Avenue about 40 feet higher than the 290-foot height limit, took a bit of wheeling and dealing.

In order to gain the community’s nod for the tower, and by association the expected approval of local Councilwoman Inez Dickens, Vornado had to work out an agreement with Community Board 11, pledging to give more than $1 million in concessions.  read more »

The path may now be clear for Vornado Realty Trust to build Harlem’s first Class A office tower in decades, as the developer has received the nod from the city to proceed despite a possible rezoning of the area.

Vornado wants to build a tower of about 330 feet, which is 40 feet higher than the height limit in the proposed rezoning.  read more »

At the center of recent concern—voiced by advocates, officials and others involved with the process—surrounding the viability of the redevelopment of Pennsylvania Station is where all the money will come from to fund it. [More on the broader issue here.]

State officials have said the redevelopment of Penn Station, part of a grander project known as Moynihan Station, will cost at least $2.2 billion (with emphasis on “at least”), and there’s a whole lot more funding that needs to be secured.

And while the state and other officials deny the plan is falling apart, expressing optimism, we thought a recap of the various funding commitments and potential sources was in order:  read more »

The city’s Industrial Development Authority had a hearing this morning on a request for subsides at Vornado Realty Trust’s planned Harlem Park development on 125th Street, which would be home to Major League Baseball’s new television network.

Vornado is contending that it needs $7.8 million or so in tax breaks in order to complete the office and retail project, saying in its application to the IDA that the project will benefit the city. MLB wants $2.23 million in breaks to take 132,000 square feet and be an anchor tenant in Vornado’s tower, saying the development will add scores of jobs.  read more »

Developers Related Companies and Vornado Realty Trust have been pouring money into the proposed redevelopment of Pennsylvania Station as part of the grand Moynihan Station project, spending tens of millions of dollars so far in the project’s planning.  read more »

Things don’t seem to be all that peachy these days in the planning process for a multi-billion-dollar redevelopment of Penn Station, to be known as Moynihan Station.

The plan for the project hinges on the Dolan family’s Madison Square Garden moving to the back of the neighboring Farley Post Office building, clearing the way to redo Penn Station, along with adding a concourse in the Farley building.

Though, in recent weeks, advocates, community members and others involved with the process have expressed increasing concern that the Garden could throw a wrench in the whole process, frustrated by the slow-moving bureaucracy and the intransigence of preservationists who are concerned about major alterations to the historic Farley building.  read more »

Hotel Pennsylvania preservationist Gregory Jones recently received a Valentine's Day greeting from the city's Landmarks Preservation Commission--er, more of a Dear John letter, really.

The message, dated Feb. 14, reads: "At this time, the property does not appear to meet the criteria for designation and will not be recommended to the full commission for further consideration as a New York City landmark."

Yet, Mr. Jones, who has spearheaded efforts to save the old hotel from possible demolition, remains undaunted: "We won't take no for an answer," he told The Observer via e-mail. "We will continue to find a new way of saving this hotel with or without the [commission's] help."

Endangered Hotel Pennsylvania is rolling out the wood chips once again for its most highly regarded guests -- the four-legged stars of the annual Westminster Kennel Club Dog Show, taking place next week.

Competing canines will be treated to "sound healthy" live piano music in the lobby on Saturday afternoon, Feb. 9, and the hotel's basement conference hall will be converted into "perhaps the largest in-door doggie spa in all of New York" -- including a "his/her's relieving area," according to a press release.

Last year, at this time, The Observer wondered where the dogs might go once landlord Vornado Realty Trust made good on its threats to tear down the dog-friendly hotel.

Some guests back then were informed that the hotel wasn't taking reservations for the 2008 show.

For the time being, at least, the pampered pooches appear to have gotten a reprieve.  read more »

Harlem’s first Class A office tower in decades could be running into some trouble with the city’s proposed 125th Street rezoning, which is currently ambling its way through the public approval process. (We have more on the 125th Street rezoning in this week’s issue.)

At a hearing before the City Planning Commission this morning, the principal at co-developer Integrated Holdings, Derek Johnson, said that if the rezoning goes through as currently proposed, it would force height reductions and modifications to the 600,000-square-foot Harlem Park tower planned to rise by the Metro North station, jeopardizing leases with tenants who have agreed to take space in the building. The approximately 330-foot tower, developed by a partnership of Integrated, Vornado Realty Trust and MacFarlane Partners, would need to be shrunk to come in line with the 290-foot height limit in the rezoning.  read more »

"Well, we won a small victory in the battle, but the fight isn't over yet," said Gregory Jones.

The lead organizer of the "Save The Hotel" campaign was reacting to news that financial giant Merrill Lynch will likely stay put in the city's financial district -- and not relocate to the site of his beloved Hotel Pennsylvania.

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The Wall Street Journal today reports that Merrill Lynch is likely to put off a decision on its headquarters location for at least another five years, as it is seeking a five-year lease renewal with current landlord Brookfield Properties at the World Financial Center downtown.

Such a move comes as good news for Brookfield, and seems to be not so great news for Larry Silverstein, who had hoped to lure the bank into his 175 Greenwich Street tower, a.k.a. 3 World Trade Center.  read more »

At least one preservation group is speaking up on behalf of the endangered Hotel Pennsylvania.

The Historic Districts Council (HDC) has formally asked the Landmarks Preservation Commission to hold a hearing on proposals to protect the old McKim, Mead & White-designed hotel, which owner Vornado Realty Trust has threatened to demolish.

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Vornado Realty Trust will now pay four times as much for air rights over the Port Authority Bus Terminal than it would have under an earlier agreement abandoned four years ago, according to a deal announced today

“I’m sad,” Vornado’s Chairman and Chief Executive Steven Roth said after a press conference at the terminal this morning. “Let’s not talk about the past. But the answer is that what we are paying for the air rights is in sync with where commercial rents are.”

In other words, he can afford it. Otherwise, why bother renegotiating the deal?

Vornado and a partner, Ruben Companies, will pay roughly $500 million over the length of the 99-year-lease, the Port Authority of New York and New Jersey said. The 1.3 million-square-foot building will rise 42 stories over the north end of the terminal, using air rights transferred from the south end, according to Frank DiMola, deputy director of development at the Port Authority. The exact height was not available.

The earlier deal, which newspapers have valued variously at $110 million to $130 million, was struck in 2000, but was called off in 2003, apparently because of the poor economy. Since then, the real estate market has rebounded and even Eighth Avenue, once the tawdry edge of Times Square, has become respectable.

The revenue will pay for renovations at the terminal--making the brick interior a bit brighter, improving pedestrian circulation, adding bus gates—as well as pay for part of a $545 million bus garage that the Port Authority wants to build somewhere on the West Side.

Mr. Roth said that ground would be broken in two years and the tower would be completed in 2013.  read more »

It’s official: midtown South has been annexed by midtown, as the prospect of billions in investment in Penn Station and some 7.5 million square feet in anticipated development by Steve Roth’s Vornado Realty Trust have convinced a major brokerage that things are changing along 34th Street.

CB Richard Ellis today announced that the Empire State Building, the Penn Plaza buildings and others in the area will now be included in the firm’s definition of “midtown.”

The move, which also stretched the boundaries to include the New York Times building on Eighth Avenue, puts about 17 million square feet of office space into midtown, according to CB Richard Ellis.

Press release after the jump.  read more »

The joint proposal for the West Side Rail Yards by the Durst Organization and Vornado Realty Trust is obsessed with getting people to the far West Side. The developers propose a subterranean “people mover” below 33rd Street that would carry up to 20,000 riders an hour from Penn Station to 11th Avenue (although it was not clear just who would pay for it); a pedestrian skyway that floats over the entire site and Hudson River Park; and a new headquarters for Condé Nast.

“We felt that we wanted to maintain the kind of porosity that we get in the best parts of the city,” said architect Rafael Pelli, who designed the plan along with FxFowle. “We are really trying to relate it to Union Square, Bryant Park or even a Times Square. We are thinking about how this is going to be a diverse and useful area and attract people from a greater catchment area rather than an enclave.”

The plan, one of five submitted to purchase the yards from the MTA, envisions four office or mixed-use towers, the tallest of which will be 1,205 feet tall. (It's online here.) The new Condé Nast headquarters would go at the southeast corner of 33rd Street and 11th Avenue. Overall, the plan is heavier on residential space than the other four proposals, with about 7,000 apartments, an unspecified number of which would be affordable.

A broad low-lying kunsthalle on the southeastern flank would house a cultural institution; its 120,000-square-foot floor plates, Mr. Pelli said, would be ideal for flower and antique shows (and, one might add, provide competition for the troubled Javits Convention Center expansion plan on the other side of 34th street).

The project, in keeping with Douglas Durst’s environmentally progressive reputation, includes a number of green features, among them a co-generation plant to capture the heat thrown off by generating electricity; a treatment plant that would allow the complex to reuse wastewater for plumbing purposes; and bris soleil, a type of awning that would shade out the summer light while letting in winter light.

Vornado, with its $18 billion in assets, is lending some financial heft to the bid.

“A lot will rely on the capital strength of the bidder,” Vornado Chairman and Chief Executive Steve Roth said. “I think it is obvious that this is an enormously complex project so the success of the project may ride and fall on the financial strength of the winning bidder; that will be a very important differentiating tactic.”

The New York Post's real-estate ranter Steve Cuozzo today ridicules the campaign to landmark endangered Hotel Pennsylvania, denouncing the old inn as "one of the gloomiest structures between the Battery and The Bronx."

The last-minute drive to save the hotel is flagrant anti-development obstructionism, under the thinnest possible mask of preservationism. It will likely go nowhere.  read more »

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Vornado-owned Hotel Pennsylvania has agreed to pay nearly $100,000, court records show, to a group of six tourists who claimed to have been bitten by bedbugs while staying at the old Seventh Avenue lodge.

The alleged victims included two Swiss women reportedly "eaten alive" by the nocturnal blood-sucking insects in 2005.

The victims' attorney, Adam Sattler, called the amount of the settlement "satisfactory," adding that the hotel has since taken steps to better prevent the pests from infiltrating rooms and attacking other guests.

The 22-story, McKim, Mead & White-designed building, erected in 1919, has been the subject of much debate lately. Vornado has threatened to demolish the hotel and erect a giant office tower in its place, while activists have campaigned to preserve it.

Perhaps best-known as the inspiration for the old Glenn Miller tune, "Pennsylvania 6-5000," the less-than-luxurious state of the once glamorous Hotel Penn was perhaps best described by comic Dave Barry in his 2002 Miami Herald column, "Hotel, schmotel -- I'll just shtay in the shtreet."

As if those nostaglic Glenn Miller-minded preservationists didn't have an uphill battle already!  read more »

Activists campaigning to preserve the historic Hotel Pennsylvania have unveiled a slew of new propaganda in anticipation of Thursday's community board meeting on the possibility of landmarking the old inn.  read more »

There's hope for the old fleabag yet!

In a surprise 6-to-1 vote last night, the landmarks committee of Manhattan's Community Board 5 voted to recommend designating the historic and endangered Hotel Pennsylvania as an official city landmark.

If approved by the full board next week and later by the city's Landmarks Preservation Commission, the proposal could save the old 22-story inn from the wrecking ball. Owner Vornado Realty Trust wants to tear it down and erect a giant office tower in its place, possibly as a new headquarters for Merrill Lynch.

The board's vote ran counter to the wishes of the Municipal Arts Society, which informed the panel by letter that it did not support the designation for fear of interfering with Vornado's planned redevelopment of the nearby Farley Post Office.

Even Joyce Matz, perhaps the panel's most zealous preservationist, did not support the motion, noting that the "banal" building was actually designed by "lesser junior staff" members of the hallowed architecture firm McKim, Mead & White. (Both Charles McKim and Stanford White were dead by the time the hotel was built in 1919.)

"I had discussions with three very noted architectural historians, and the feeling was this, [the hotel] is not the best, nor one of best, hotels that McKim, Mead & White designed," Ms. Matz said. "It is not a significant design, nor is the facade of exceptional interest."

Others, though, pointed to several unique cultural attributes, including the Glenn Miller-popularized "Pennsylvania 6-5000," which remains "New York's longest continually used phone number."

The hotel is also "one of the last surviving examples of very large hotels built to accomodate train travelers," noted writer Carter B. Horsley, who typically doesn't speak out on such issues, he said.

The full board will take up the issue on Nov. 8. The meeting takes place at 6 p.m., located at 227 West 27th Street, Building "C", Haft Auditorium, 2nd Floor.

Beleaguered financial giant Merrill Lynch has "given every indication" that it intends to move from downtown to a new skyscraper where the historic Hotel Pennsylvania now stands at 401 Seventh Avenue, according to today's