$120M Chelsea Marriott Development Hindered by Edison Properties, Kaufman Org: Lam
Lauren Elkies Schram Feb. 17, 2017, 11 a.m.
Developer Jeffrey Lam of Lam Generation is unable to move forward on the development of his $120 million Marriott International hotel on West 25th Street because two real estate companies won’t let him into their adjacent building, according to a new supreme court case.
Lam hopes the court will grant him a limited license to gain access to 119 West 24th Street to install, maintain, and then remove protections to the property, which is adjacent to Lam’s West 25th Street hotel site. Since 2015, the West 24th Street building has been owned by HLP Properties, a company affiliated with New Jersey-based Edison Properties, and is ground-leased to Kaufman Organization since the year prior.
As Commercial Observer reported at the end of 2015, Lam is replacing the shuttered weekend-only Antiques Garage Flea Market at 112 West 25th Street between Avenue of the Americas and Seventh Avenue with a glassy hotel. According to court documents, current plans call for a 181,998-square-foot, 40-story, 341-room Marriott hotel. He anticipates a 24-month construction job.
Lam bought the site from Extell Development Company in August 2013 for $67.5 million, property records show. He has received “approval and initial permits for the project from [the New York City Department of Buildings],” court papers say, and he “has secured extensive financing from myriad sources including through a mezzanine loan, the repayment of which is dependent upon timely, successful completion of the project.” Lam is also concerned that a further delay could potentially result in him losing the Marriott license.
The hotel developer needs to install window and skylight protection over the West 24th Street building’s rear yard and skylight. After coming to an impasse with Edison and Kaufman over a license agreement, which allegedly included Lam offering $120,000 toward a wall’s repair, Lam turned to the courts earlier this month.
Lam and his attorney, Michael S. Farber, didn’t respond to a request for comment. A Kaufman spokeswoman said the company wouldn’t be commenting. A person in the legal department at Edison, who wouldn’t identify himself, declined to comment.
The next court date is March 7.