A source said that Morgan Stanley, which is in the market for 800,000 square feet, has also kicked around the idea of a move to the World Trade Center site—as sure a sign as any that the center could once again become integral to the country's finance industry.

Well, not so fast, said another source, who noted that Larry Silverstein is in no hurry to sign tenants right now, preferring to wait until towers two, three and four are closer to completion and he can fetch rents possibly into the triple digits per square foot on the upper floors.

Meanwhile, it was earlier reported that Morgan Stanley was mulling a move to Goldman's dowager former headquarters at 85 Broad Street, but a source close to the matter said the bank is not negotiating there.

For now, our money is on a renewal at Brookfield's 1 New York Plaza. It might not have quite the views of its shimmering WTC counterpart, but there's always been something to be said for the familiar.

A call earlier to Morgan Stanley's broker, Newmark Knight Frank's Barry Gosin, was not returned.

No, New York.

Adding a much-needed gloss to the city's ho-hum roster of mega-tenants, L'Oreal, the world's largest cosmetics company, has just started looking for 500,000 square feet for its New York headquarters.

The company's current HQ is at the Emery Roth-designed 575 Fifth Avenue, but the lease expires in 2015. The 520,000-square-foot building at 47th Street, which was bought by Metlife in 2005, is also home to the Guess flagship store. L'Oreal also has office space at 565 Fifth Avenue and 435 Hudson Square.

The tenant is represented by a team led by CB Richard Ellis' William Hedman, who would say only that the search is very preliminary and the tenant could also choose to renew.

Most of the handful of tenants out there looking for that much space are finance types, and none of the sizeable blocks of space on the market right now would seem to suit such a glamorous tenant as L'Oreal (think 3 Columbus Circle's small floorplates or 11 Times Square's Eighth Avenue locale). But with its sights set as far off as 2015, there's always the first tower at Hudson Yards. If it's good not enough for Coach, maybe  it's good enough for Liliane Bettencourt.

Safe?

Mid-tier developer Ziel Feldman has pledged $200 million to rescue the city's most troubled residential tower from bankruptcy and take full control of One Madison Park.

According to MarketWatch, Mr. Feldman will team up with the CIM Group (a rumor we've heard flying around for several weeks).  The California-based fund is also developing the Drake Hotel site with Harry Macklowe and is working with the Sapir Organization on William Beaver House and the Trump Soho.

The Observer previously reported that Mr. Feldman had bid $165 million to take over the tower. Similarly, according to this plan, the iStar debt will be split into two components: a $162 million secured note and a $69 million unsecured claim that could possibly be waived.

Months have passed since Mr. Feldman emerged as the leading bidder for the tower, with multiple delays in filing the rescue plan. Nonetheless, Mr. Feldman is far from home safe. Steve Ross' Related Company and Amalgamated Bank, a junior lender, are also vying to take control.

Even if Mr. Feldman and his powerhouse partner, CIM, succeed in taking over the unfinished tower, it will require millions of dollars of renovations, including finishing the lobby, pool and spa. Experts say they will need to fetch on average $2,500 a square foot for the condos to turn a profit.

Haven't seen this face in a while.

Nothing takes us back to that halcyon year of 1996 as does seeing the likes of Michael Ondaatje and Drew Carey in the same paragraph. In a delightful blast from the not-so-distant past, the stars' respective talent agencies have renewed at the Rudin family's 41 Madison Avenue.

The Gersh Agency, who, in addition to a svelter Mr. Carey, also reps Jamie Foxx, has renewed its 13,000-square-foot lease for the entire 33rd floor for another 10 years. Augustus B. Field IV of Cushman & Wakefield represented the tenant, which also has offices a bit closer to the action in Beverly Hills. Tom Keating represented the landlord in-house.

Adding a dash of the high brow, literary agency the Trident Media Group has also renewed a 13,000-square-foot lease on the 36th floor for another six years. Keith Cody and Cregg Rothkin of CB Richard Ellis represented the tenant; Robert Steinman repped the landlord in-house.

“Tenant retention has always been a major component of the Rudin Management philosophy," said a typically understated Bill Rudin in a statement, "so we’re delighted that both of these creative agencies will continue to call 41 Madison and Madison Square Park their home for many more years to come.”

Speaking of show biz, the Emery Roth-designed tower is also home to 23 stories of showrooms for tableware manufacturers.

83 Walker rendering.

Way under the radar, a lovely new Tribeca condo is growing at 83 Walker Street and The Observer has caught an initial peek.

The new nine-story building by Brooklyn developer Abra has just received a unanimous go-ahead from the Landmarks Preservation Commission.

"It’s a beautiful Tribeca building with a twist," said architect Morris Adjmi. "It's an inversion of a cast iron building ... It really informs us about the nature of a cast iron building: Originally, they were built from components that were ordered from catalogs."

Mr. Adjmi creates his unusual inversion by casting a glass-reinforced concrete that is the opposite of the typical Tribeca facade. Instead of columns curving out from the building, they are indented into it. The windows, typically recessed, jut out from facade. It is as though the building across the street had been pressed against this one while it was still drying.

The development still needs approval from the City Planning Commission, but after that construction is slated to begin in around nine months.
"Designing a building in context makes for very special buildings," said Mr. Adjmi. "That definitely proved to be true."

10-Front Elevation (5)

West Coast classic.

Raw fish is a dish we generally prefer with a side of irony. Thus, in our second-favorite reason this week to mock BroBillies, the nabe is getting that snooziest of cuisines, an Asian fusion restaurant.

Indeed, the press release contains more signs of the Apocalypse than we can count. To wit: "Fushimi offers a family-friendly, yet stylish setting that will appeal to upscale, late-night crowds as well as families and hipsters alike," notable, among other things, as the first indication the real estate PR world has discovered the hipster.

The company has leased 7,200 square feet at 475 Driggs Avenue, on the corner of North 10^th Street, a new mixed-use development designed by our pal Montreal architect Karl Fischer. The restaurant, meanwhile, has been around for nearly a decade in such culinary hot spots as Staten Island and Bay Ridge.

Winick Realty’s Diana D. Boutross represented both the tenant and the landlord, Driggs Development, in this long-term lease transaction.

Steve Ross' latest prize?

In the real estate equivalent of Mariano Rivera parachuting into a tight ninth inning, Steve Ross has just made a play for troubled tower 1 Madison Park.

Mid-tier developer Ziel Feldman is just days away from presenting his rescue plan for the beautiful though far-from-perfect condo. But now The Wall Street Journal reports that Mr. Ross' Related has made a sudden play with junior lender Amalgamated Bank to buy the debt held by iStar and seize control of the tower.

The plans came to light in a lawsuit filed by Mr. Feldman's HFZ Capital on Monday, accusing Amalgamated of "attempting to swindle a lucrative corporate opportunity."

A spokeswoman for HFZ said the company still intends to submit its plans to the court, but our favorite summer spectator sport just got a lot more interesting.

You can see right through this one, too.

TD Bank’s latest real estate move lends new meaning to their gestures at increased transparency.

The Canadian-based bank has just signed a lease for a 4,000-square-foot space on the ground floor of a new all-glass retail and office space at 201 East 57th Street, the New York Post reported. Although currently little more than a hole in the ground, the site’s owner, Merchants National Properties, intends to open the building within the year.

Marx reality is managing the development project which, according to their website, will offer 30,814 square feet of glass enclosed retail space. Susan Kurland and Sloane Rhulen of C.B. Richard Ellis represented the landlord, while Joanne Podell of Cushman & Wakefield represented the tenant.

Unfortunately transparency comes with a hefty price tag. The New York Post reports that TD Bank will pay $1.22 million rent for the first year. Considering the neighborhood, however, TD Bank’s investment becomes crystal clear: the new building is within spitting distance of Bloomingdales, Le Cirque and the Four Seasons. We can only hope that the window washers’ fees are included in the settled upon sum.

The possible look-alike, 263 Bowery.

After scoring a smashing successlet with 263 Broadway, a diminutive Karl Fischer-designed luxury condo, developer Shaky Cohen has dreamed up a new seven-story development just a few doors down.

Mr. Cohen has dropped $5.5 million on a small plot of land at 255 Bowery Street, where he plans to build a new development with two stories of retail and five stories of residential, he told The Observer. It will contain four to five luxury residential units. He plans to invest another $4 million and start construction in five months.

Mr. Cohen has tapped Montreal-based architect Mr. Fischer to design this 25-foot building as well, but says the facade will look different from the silky smooth exterior at 263 Broadway (which earned Mr. Fischer the catchy nickname "barfitecht").

Meanwhile, despite a certain blog-fueled backlash, sales are going briskly at 263 Broadway, where units are selling for around $1,700 a foot and only the penthouse remains.  Mr. Cohen is also developing a project in the East Village, another project at 107th and Broadway, and one in Harlem at 117th and Frederick Douglas Boulevard.

Ready for a touch up. (Property Shark)

It's very rare indeed for us to uncover a tenant so prospective they haven't even started looking yet. But with a hot rumor that L&L Holdings plans to build a new office tower at 425 Park Avenue, Kaye Scholer may need to start hunting for a massive block of space any day now.

The sale of 425 Park to TIAA-CREF, the pension fund manager, hit public records last week, as noted by Real Estate Weekly. The seller of the fee was the Goelet family.

But note the more important detail, that David Levinson's L&L has a long-term net lease on the property, with a sublease to a partnership that expires in 2015. L&L  plans to hold an architectural competition to develop the site once they take control in 2015, and turn it into a brand-new, 600,000-square-foot building, according to a source. Given 425 Park's perfect location on the corner of 56th Street, currently wasted on the uninspiring Kahn & Jacobs-designed building, that seems like a wise bet.

Kaye Scholer, a law firm with more than 450 associates around the country, currently occupies 300,000 square feet in the building until 2015. They're represented by Craig Reicher and Tim Dempsey of CB Richard Ellis, who declined to comment, except to say the firm hasn't started looking yet.

As source close to the company said that plans have not been finalized. L&L declined to comment. What's certain is that when and if they do venture out, Kaye Scholer will be one of the largest new tenants to come on the market in a while.

He chose glass, of course.

It took five years for the first penthouse at the Richard Meier-designed On Prospect Park to sell, but significantly less than that for the architect to lock down a new lease.

Richard Meier & Partners has signed an early renewal of their 18,500-square foot lease at 475 10th Avenue. They'll be hanging out on the sixth floor of the trendy far West Side glass castle for at least another 10 years.

They find themselves in good company, given that starchitects Gwathmey Siegel & Associates Architects also wield their t-squares inside, and beautiful people like Donna Karan and Isaac Mizrahi also have offices there.

Jim Robbins and Harly Stevens of CB Richard Ellis represented the tenant; the landlord, the Adler Group, was repped in house. The asking rent was $30 a square foot.

“Eleven-fifteen Broadway has always catered to the seasonal products industry,” said James Buslik of Adams & Co. in a statement. “However, we are now bringing these companies into a defined area in order to support the building’s presence as a destination building for seasonal products, while allowing other industries to come in.”

The tenants in this 12-story Garment District haunted house near 25th Street are a veritable witch’s brew:

Paper Magic Group, maker of various delightful paper decorations, signed a six-year, 8,120-square-foot renewal and expansion. Elope Incorporated, which specializes in costume glasses and hats, signed a five-year, 1,999-square-foot renewal and expansion.

Underwraps Costumes, whose various provocative cat and nurse costumes represent all that’s wrong with the holiday in our minds, also signed a three-year, 1,441-square-foot lease. Finally, Rasta Imposta, whose main claim to fame is those dreadlock hats synonymous with the unimaginative Jamaican vacation souvenir, signed a six-year, 1,378-square-foot renewal.

Along with James Buslik, Jeffrey Buslik and Nicholas Zagar represented the tenant and the landlord in all transactions, for which the asking rents were $35 per square foot.

Well, while the rest of the economy is in the dumps, it’s nice to hear that at least the Halloween specialty products industry is booming

Trinity ultimately took back the lease, and today announced that a new 99-year ground lease has been signed with Boston-based Beacon Capital Partners. Now the site, considered vital to the area's transformation, will become a 350,000-square-foot office building, according to a statement. We were hoping for something a bit sexier, but Trinity Realty President Jason Pizer apparently disagrees. “With several new hotels in the area," he said, "the current proposed office/retail mix is clearly the most attractive and compelling development option." At least the 20,000 square feet of retail on the bottom keeps our hope alive.

The proposed building could add 1,200 workers to the area, according to Trinity. “We are delighted to welcome a company with the strength, experience and track record of Beacon Capital Partners to Hudson Square,” Mr. Pizer said.  “They are committed to moving forward expeditiously on this key property and we are confident the development will add immeasurably to the quality, vitality and excitement of this dynamic community."

Indeed, Beacon Capital also recently closed on the landmarked AT&T building, so it's clear they have no fear of a challenge.

Mr. Lopez at work.

A rare divide has formed between Democrats and affordable housing advocates over a prevailing wage provision in the extension of the popular 421-a tax credit. Those advocates say that an extension of the 421-a tax credit that includes requiring them to pay prevailing wages to construction workers on non-public projects will drastically reduce the number of affordable housing units being built in the city.

Brooklyn Assemblyman Vito Lopez, chairman of the Housing Committe, and Senator Adriano Espaillat, of northern Manhattan and the Bronx, have proposed a bill to extend the 421-a credit for new development in the city, which expired in December. That bill will also require developers to pay prevailing wages on many new projects with more than 80 units.

“This would have a devastating impact on the industry,” said Alison Badgett, the executive director of the New York State Association for Affordable Housing, a trade association. “There’s widespread recognition that development will stop with prevailing wage, and we cannot build affordable housing without [the 421-a] exemption.”

Prevailing wage would require salaries of $46 an hour for carpenters, as opposed to a median wage otherwise of $27, according to the state Department of Labor.

Those wages would increase the cost of affordable development by 25 to 50 percent, according to a 2008 study by the Center for Government Research. That would offset the benefit from the 421-exemption and make it difficult for them to move ahead with projects, especially given that financing for new residential development is difficult to get right now, say developers. “You cannot add this much cost to a project and not have the result be that there will be fewer projects,” said Brian McMahon, the executive director of the New York State Economic Development Council.

“We put prevailing wage in because the trade unions asked us to put it in,” said Mr. Lopez, a long-time ally of affordable housing advocates. Union leaders point out that the government gave away $930 million in tax breaks under the program this year, and it should provide a broader economic benefit for workers. Mr. Lopez added that wage requirements would affect a narrow range of projects with between 80 and 200 units. (Affordable housing advocates say most of their projects have 100 to 200 units.)

With two weeks left in the legislative session, the bill proposed by Messrs. Lopez and Espaillat is just one of the pieces of legislation on the table to extend 421-a, including one by Republican chair of the Senate Housing Committee Catharine Young, which does not include prevailing wage. The Lopez/Espaillat bill could get swept up in an omnibus bill that would also include rent regulation and a property tax cap, but Mr. Lopez described that as “highly unlikely.”

Meanwhile, behind-the-scenes negotiations are taking place. Steven Spinola, long-time president of the Real Estate Board of New York, has met with Gary LeBarbara, head of the New York State Building and Construction Trades Council, over the course of the last month. “We’re talking to labor leadership about their proposal,” Mr. Spinola told The Observer a few weeks ago. “Clearly it potentially adds costs to projects.”

Democrats also say they’re willing to negotiate, but advocates see little room for compromise. “We would be concerned with any compromise that established thresholds or standards for when prevailing wages could apply," said Mr. McMahon, of the development council. “The precedent would be incredibly important. For the first time we’d be mandating prevailing wages on non-public work projects.”

Bird watching in Bryant Park. (Bryant Park Blog)

Notwithstanding the seemingly thousands of pigeons that have occupied Bryant Park, Manhattan is getting its first wild bird sanctuary.

The Wild Bird Fund will be an 800-square-foot roost for all manner of feathered friend at 565 Columbus Avenue, between 87th and 88th streets. 

“This will be a great location for them," Winick Realty’s Brian Tregerman in a statement. "Not only is the store close to Central Park, but it’s also on what’s becoming a very pet-oriented block, with the Center of Avian and Exotic Medicine and a pet store nearby.”

(We feel compelled to point out, however, that the world's most famous urban park is but a block or so away. Should the birds bust their cage, as it were, that could make for some serious avian watching for generations to come.)

Mr. Tregerman, along with Joseph Isa, represented both sides in the 10-year lease transaction.

lkusisto@observer.com