The Philip Johnson-designed office tower at 550 Madison Avenue is the city’s youngest landmark. Completed in 1984 as the headquarters for AT&T, the 41-story skyscraper was controversial when it was first built and sparked drama again two years ago when its current owner, Saudi conglomerate Olayan Group, unveiled a plan to replace a portion of the building’s facade with glass.
But the city’s Landmarks Preservation Commission designated the postmodern property a landmark last year. The historic protection forced Olayan to go back to the drawing board and come back with a more conservative design that kept the facade the same while revamping a large public space on the ground floor into a garden.
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The renovation, designed by Snøhetta, also involves reconstructing the building’s six-story lobby, expanding the public space to 21,000 square feet, and updating the interiors with new windows and mechanical systems. The public open area behind the building is getting a new canopy, 42 trees, eight bike racks and seven public restrooms. Interior work includes new ground floor retail along Madison Avenue, an air conditioning system that constantly pipes in fresh air from outside, new elevators, and an amenity area on the 10th floor with a 10,000-square-foot gym, grab-and-go café, and a coffee shop. Construction is expected to be complete in late 2020.
The top three floors of the tower were constructed as executive floors for AT&T and feature a lavish white marble staircase linking all three stories. Although the rest of the building is being renovated, the dramatic staircase will remain. Erik Horvat, Olayan America’s director of real estate, called the stairs a “symbol of American strength and guts and politics … you just have to be a giant company that doesn’t care [about the cost].”
He noted that the building was open to smaller tenants for the first time in its history. “You’ve got a building that was insular with just big corporations. And now, it’s opening itself up really for the first time. That’s really exciting.”
AT&T negotiated a zoning bonus for the 850,000-square-foot building in 1978 so it could add six extra floors to its proposed tower, according to The New York Times. In return, the telecom giant agreed to build a covered pedestrian arcade behind the building, a three-story communications history museum, and a covered public space on Madison Avenue with retail and seating. After the United States Department of Justice sued AT&T for violating antitrust law in 1982, AT&T agreed to surrender some of its subsidiaries and never fully occupied 550 Madison. AT&T attempted to renege on its zoning deal with the city when it realized it could not afford to use the entire building. But the city ultimately pressured the company into building the museum it had promised, in exchange for a $42 million tax break. Then AT&T was forced to return $14 million of the tax abatement because the city had awarded it on the condition that AT&T occupy the entire building and not sublease to other tenants.
Sony leased the entire building in 1991 and used its as its corporate headquarters for 25 years before it was sold to Chetrit Group and more recently, Olayan Group. Olayan’s U.S. investment arm, Olayan America, purchased the property for $1.4 billion in May 2016. Asking rents for offices range from $100 to $200 per square foot, and CBRE’s Mary Ann Tighe and Howard Fiddle are leading the leasing team.
