Stirrings at North America’s Most Valuable Development Site
Jim Hanas April 15, 2011, 9:22 a.m.
Developers are moving forward with super-secretive plans to begin construction on the most valuable development site in North America.
A team led by the California-based CIM Group has filed an application with the Department of Buildings to begin construction on the site, at Park Avenue and 57th Street where the Drake Hotel once was, according to public records. Associates of Harry Macklowe, which purchased the site for $418 million in 2006, are listed on the application.
The plans submitted to the city call for a mere five-story office tower, but that is a possible tactic to get the development moving before plans are finalized or financing is secured. Industry insiders told The Observer that a 70-story residential tower is planned, with as much as three stories of luxury retail on the bottom, but that could not be confirmed. Nordstrom’s, which was previously slated to take the retail space, is reportedly still considering it.
The Drake Hotel site has been fallow ever since Mr. Macklowe demolished the Gilded Age reminder. Deutsche Bank sued Mr. Macklowe over an unpaid $30 million debt on the site in August 2008. Los Angeles-based CIM purchased the site from Deutsche Bank for $305.4 million in January 2010. They have also been quietly assembling or trying to assemble several townhouses around the site, in preparation for development. Mr. Macklowe is still said to be involved in the planning, with little or no financial stake, according to people familiar with the deal, but not directly involved.
“It is inarguably the best development site in North America,” Eric Anton of Eastern Consolidated told The Observer this week (he is not involved in the development plans). But, he added: “They need to get going. Time kills all deals.”
A CIM spokesman declined yesterday to comment, saying the company does not engage in market speculation. Multiple voicemails to Harry Macklowe and his associates were not returned over the last week. Earlier, CIM secured a $30 million mortgage for the site, The Observer reported.