Times Square with Marriott Hotel
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A new 39 story tower is finally going up at 701 Seventh Avenue, on the North East corner of 47th Street after many false starts. It will comprise 100, 000 square feet of retail space with Marriott’s new upscale hotel sitting on top of it.
Marriott describes their EDITION brand as a first class, full service, luxury lifestyle brand within the Marriott International portfolio, conceived in collaboration with legendary hotelier Ian Schrager.
Ian Schrager is a design guru who adds spice to the interiors of modern hotels. Two of his previous projects on Times Square were icons in their day, before ownership changes, and economic recession, led to rebranding that took them in a different direction at the time. The new hotel design will feature floor to ceiling windows with unobstructed views of Manhattan in seventy percent of its 452 guest rooms.
There is a complicated ownership structure for the development group, which is finally getting ready to put shovels in the ground. Steven Witkoff of the Witkoff Group, who recently purchased the Helmsley Park Lane Hotel on Central Park South seems to be in charge of the joint venture. The other members of the group are Boston based, publicly listed Winthrop Realty Trust led by Michael Ashner, Miami based New Valley led by Howard Lorber and Maefield Development of Indianapolis which is headed up by Mark Siffin.
Much of the financing for the new project, for both the retail and the hotel components, is coming from Barry Sternlicht’s Starwood Capital Group, who is no stranger to the hotel industry himself, having developed and later sold the Starwood hotel chain. Starwood will also apparently have an equity interest in the deal as well. There will be a construction loan of US$815 million for the whole project, coming from Starwood and iStar Financial Inc.
Marriott will manage the hotel under a long-term agreement, which is their usual style. However, in an interesting twist, the project’s developers have a “put” to the hotel company for up to two years after it opens if operations are not going well by then. The right of put will be for the hotel component of the building only, and will be executable at the budgeted original cost of US$314.6 million- equivalent to US$696, 000 per room.
Arne Sorenson, Marriott’s President and Chief Executive Officer said of his new baby, “New York is one of the most important destinations in the world, and we are delighted to have secured yet another iconic Manhattan location for our second EDITION hotel in the city”. The first one is in construction at 5 Madison Avenue and opens in 2015.
In keeping with the identity of the EDITION brand, Ian Schrager will lead all creative design and positioning for the hotel, as well as the entertainment programming offered within the property.
“Following the hugely successful opening of The EDITION in London, England last year, we couldn’t be more excited about the potential for this brand, ” said Mr. Sorenson. “The Witkoff Group is an ideal partner for a project of this magnitude and we are thrilled to be working together, ” he added.
Just this month the London EDITION received the “Best Hotel, 100 or More Rooms” Award by Travel + Leisure as part of the magazine’s annual design awards.
(L-R) Barry Sternlicht, Steven Witkoff and Ian Schrager/Getty
Chairman and CEO of The Witkoff Group said, “We are excited to team up with Marriott International, Ian Schrager and our partners to complete the most significant new development in Times Square in a number of years, ”… adding “In addition to introducing the extraordinary EDITION brand to Midtown, the project will feature a significant amount of prime retail space in one of the world’s most trafficked and successful shopping districts.”
Compared to the way the project was originally conceived the hotel component is a little smaller and more retail space has been added to the mix. To optimize the economics of the project, air rights were added from two of the nearby theatres, the booth Theatre and the Plymouth theatre, both on Broadway. This permitted a higher tower and greater density on the site, and also helped to maintain the viability of the theatres themselves with the moneys they received for their air rights. Win-win for everybody.
About Steven Witkoff
Steven Witkoff, who is 56, was born in the Bronx and raised in Nassau County in New York, including for the latter part of his childhood in upscale Old Westbury. He is the son of Martin and Lois Witkoff and his father was a successful manufacturer of ladies coats in the New York garment trade.
Witkoff earned his doctorate in jurisprudence at nearby Hofstra University. Hofstra later hosted presidential debates during both the 2008 and 2012 US general election campaigns.
After graduating from Hofstra as a lawyer he went to work for a local New York law firm, and by 1985 was already dabbling in small real estate deals for his own account with a partner Lawrence Gluck. By 1996 he was able to obtain financing from Credit Suisse First Boston to buy his first Class A building 33 Maiden Lane, a 27 storey building that had been designed by Phillip Johnson. Just two years later he was able to buy the Woolworth building for US$137 million together with Rubin Schron.
In 1998 after a planned IPO fell through due to a real estate market collapse at the time, he left his partner behind and set up on his own by founding the Witkoff Group, even diversifying into residential building as well to stay liquid during poor economic conditions.
Fifteen years later he has built the group into a major force in the New York and the US commercial real estate markets, acquiring or developing a number of important properties in addition to the Woolworth Building itself, which is a New York city landmark building.
He is married to Lauren and they had three sons, one of whom died in 2011.