All the Twists and Turns Behind Times Square Theater, Last Week’s Most Creative Deal of the Year Winner
By Daniel Edward Rosen June 19, 2012 10:00 am
reprintsThe New 42nd Street did not have the requisite funds to offer cash to sweeten the deal. The space itself, meanwhile, had received a “Historic Preservation Guideline Summary,” requiring that certain aspects of the theater—such as the parapet urns and ornate box seats—be restored.
“As a nonprofit organization, The New 42nd Street was not in a position to provide a tenant improvement allowance, which for a building in this condition, it wouldn’t have been unusual for a landlord to do that,” said Mr. Schmerzler. “The theater is a shell.”
Then there were the limitations set forth by the space’s master lease regarding the marketing of the space: it had to be a performance space. Permitted secondary uses included restaurant or retail.
Marvel Comics, the publisher who brought Spiderman and Hulk to life, considered the space, but an ill-timed bankruptcy in 1997 halted those plans. Burger King also looked, but was scared away by the theater’s rent requirements. And the WWF considered bringing Stone Cold Steve Austin and the Undertaker to what would have been something akin to dinner theater on steroids.
Alas, not even Hulk Hogan or his fellow WWF brawlers could pin down the deal.
By then, nine years had passed, and hope was beginning to fade. Enter Mark Ecko, the man behind a wildly popular line of edgy street wear that bears his last (and legally changed) name. In the summer of 2004, the retailer inked a lease, paid rent and embarked upon an ambitious renovation project that would transform the space into a flagship store with a “performance venue vibe.”
“Unfortunately, the changing winds of fashion, a change in Ecko’s financial position and a projected renovation cost of over $35 million all combined to result in Ecko defaulting on its lease,” Messrs. Schmerzler and Mendelson recount in their written submission to REBNY.
“What we learned was that the least expensive renovation of the building was to convert it back into a theater. The most expensive was to make it anything other than a theater,” said Mr. Schmerzler. “Which is why Ecko never opened.”
Cut to 2009. Mr. Mendelson is now with Cushman & Wakefield (CWK), working alongside Mr. Schmerzler. Once again, the responsibility of marketing and leasing the theater had fallen into his hands. With this second go-round, the duo emphasized the rare nature of the space they were marketing: the last undeveloped theater in Times Square, complete with “spectacular” storefront signage. But there was a hitch: the theater would be delivered as is—no electricity, no plumbing, the storefront boarded up—and the new tenant would have to pay all the brokerage commissions.
Enter Forbes Candlish, a man whose towering height and long, flowing gray hair give him an appearance as striking as his name. Mr. Candlish, a theater producer behind the Tony Award-winning Broadway revival of Hair, worked for Gary Goddard and Robert Kory, both of the Goddard Group.
“Gary Goddard is one of the original inventors of 3D film technology, and Gary designs the 3D attraction rides at, like, Busch Gardens, Six Flags,” Mr. Schmerzler remembered.
