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Coliseum talks continue as Sullivan calls in Tese.

In a letter to Metropolitan Transportation Authority Chief Peter Stangl, New York City Deputy Mayor Barry F. Sullivan said the agency appears unwilling to negotiate with Mortimer Zuckerman on the Coliseum site and that the city, as a result, would not issue a closing notice on Aug. 16.

Instead, Sullivan has asked Vincent Tese, head of the New York State's economic development agency, to join the discussions as mediator. Zuckerman who had pledged to buy the site has offered the MTA a number of alternate plans that would allow him to develop gradually, but the seems determined not to accept any piece-meal plans.

While the Metropolitan Transit Authority has been eagerly pushing for the monies from the $33.86 million letter of credit so as to move on with an interim rental of the building, the mayoral officials have been doing everything they can to hold the MTA at bay and give Zuckerman some breathing room.

Instead of the 57-story twin topped towers of yore, the Zuckerman/Boston Properties camp had laid on the table a two-phase project. The first phase would consist of a 25-story office building that could house Weil Gotshal & Manges, a prominent law firm whose 350,000-square-foot lease in the G.M. Building would be coming due in 1998 and is instead ambitiously seeking around 500,000 square feet. Critics point to the volatility of law firms, most of which are contracting, and wonder whether the firm's partners would sign onto any lease personally.

Although the law firm has not signed anything, according to Alan A. Lascher, a partner with Weil, Gotshal & Manges, they are having ongoing negotiations with Zuckerman.

Coincidentally, the current Coliseum office tower is 500,000 square feet housed in 26 stories. But it was constructed in 1965 and is considered undesirable and unable to be renovated to bring it to the high-tech standards needed by today's prestigious tenants.

For this new first office phase, Zuckerman has proposed paying the MTA $62 million for the land - a sum the MTA officials consider paltry compared to the original pot of gold for the entire project proposed in 1985: $338 million.

The second phase, at a time and date and price to be determined in the future, would be a 48-story, 600-foot-tall building, and payments of $3 million would be made in each of the next two years, rather like an option payment. Basically, this is an agreement to agree, and has not been looked on favorably by the MTA.

Sources indicate the MTA would rather kiss Zuckerman goodbye, choose a short-term interim use for the site, and then sell the property once again for lots of money when and if the market changes.

To that end, the MTA was presented with 15 proposals, eight of which it considers good enough to choose from, for some kind of interim tenant.

The finalists fall into three general categories but all agree to use the office tower and parking lot with appropriate partners.
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Title Annotation:New York, New York Deputy Mayor Barry F. Sullivan brings in head of New York State's economic developement agency, Vincent Tese, to mediate negotiations on development of New York Coliseum with real estate developer Mortimer Zuckerman
Author:Weiss, Lois
Publication:Real Estate Weekly
Date:Aug 18, 1993
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