Swiss Center stock bidding opens.

A major Fifth Avenue corner of Rockefeller Center can be yours - for at least the next 28 years. The 1931 Landmarked Swiss Center, on the southwest corner of Fifth Avenue and 49th Street, is on the market through Ackman-Ziff Real Estate Group, but the deal is a bit unusual.

Ackman-Ziff is actually selling the stock of the company that holds the net lease for the 110,201 square-foot property, which remains owned by Sarah Korein.

And the unique structure, while surrounded by Rockefeller Center, is not treated as part of its management or physical plant.

Still the 11-story Art Deco and International Style building, constructed at the direction of the late-Robert G. Goelet between 1930 and 1932, has location, style, tenants and upside for the winning bidder, as well as an elaborate history.

"The building is virtually fully rented," said Lawrence D. Ackman, chairman of the Ackman-Ziff Real Estate Group, which is handling the sale of the stock on behalf of the Swiss corporate ownership.

"We are not selling the building and not selling the leasehold," explained Ackman. "There is no mortgage on the property, leasehold or fee. The corporation owns the leasehold, and whoever owns it is responsible for paying all the taxes. The fee owner gets one check a month, and doesn't pay any expenses."

Ackman would not reveal the ground rent, but other real estate sources pegged it at under $1 million until at least 2011, when there is a 15-year renewal and rent reset.

There is also no asking price for the stock, and bidders must make their offer "in writing" by May 1st to Ackman, whose firm is renowned for its mortgage placements and some of the largest brokerage sales in New York City.

Unless corrected through a tax certiorari challenge, the building is slated to pay taxes based on the Department of Finance's tentative transition assessment for '98/'99 of $9.027 million, with a tentative actual of $9.63 million, reflecting a building value of about $21 million.

The Swiss first leased the fully-sprinklered building in 1964 from Chemical Bank, which was acting as Goelet's trustee. After his death in 1967, the building was sold to Korein, who continued the lease.

According to CoStar, the building is managed by LaSalle Partners and has typical floors of about 11,400 square feet.

The major tenant, which currently occupies the top three floors, is Novartis Corp. This is the company created through the recent merger of the two giant Swiss pharmaceutical companies, Sandoz and Ciba-Geigy.

Ground floor retail tenants include the Swiss National Tourist Office, Austrian Airlines, Swissair and Ruesch International, a currency dealer.

In addition, La Reserve restaurant occupies the ground floor and basement along 49th Street.

"Most tenants were renewed as of May 1, 1996 for either five or 10 years, but there is some roiling turnover," explained Ackman, who said the average rent is "only $32 (a foot)."

There are also 90,000 square feet of air rights, which can be leased to a neighboring property, "but only for the 28 years," warned Ackman.

The building wraps around the back of the Dennis Riese-owned TGI Fridays restaurant next door at 604 Fifth Avenue.

A Storied Family History

When his mother died in 1929, Rockefeller Center was under construction and Saks was already standing catercorner across Fifth Avenue. Goelet, on behalf of the Estate of his father Ogden Goelet, commissioned engineer Edward Hall Faile's firm to design a building to replace his mother's mansion at 608 Fifth and the adjoining green and cream marble Reinhardt art gallery at 606 Fifth, which Goelet had commissioned in 1920.

According to Ackman, the Goelet family had obtained the site through a grant directly from King George III. The family came from Amsterdam to America in 1676. During the 1800's, the brothers Peter and Robert Goelet made a fortune in real estate and were founders of the present Chemical Bank.

The family became very much a part of New York's best families and society. Robert's son Ogden married Mary Wilson, whose brother Marshall married Caroline Astor; while sister Grace married Cornelius Vanderbilt.

Ogden's son, Robert G., married Elsie Whelen of Philadelphia in 1904, while daughter Mary married the eighth Duke of Roxburghe in 1903.

By the time Robert G. Goelet commissioned the building at 606-608 Fifth Avenue, Faile had already designed 270 Broadway for Chemical Bank, where Goelet was a director. Goelet agreed with the then 13-year old Fifth Avenue Association's goals of architectural harmony along the developing Avenue, and as he planned to have his own offices in the building, was eager to maintain the site's prestige.

It fell upon associate Victor L.S. Hafner, as the architect of record in Faile's engineering office, to create the details that carried forward the Reinhardt building's color scheme in a new Art Deco design. This was modified pre-construction to a more International Style, reflecting the influence of the nearby Raymond Hood-designed McGraw Hill Building, which was built from 1930-31.

But it was Faile's engineering experience in designing the Third Avenue El that probably provided the Goelet property with its unusual two-story steel platform and suspended mezzanine. And it was the El which in 1937 influenced the Faile/Goelet collaboration on the inward facing and glass-blocked windowed Cottages and Garden on Third Avenue. The glass blocks kept out the noise and soot from the trains, and this taxpayer, with retail stores below and facing the street, replaced an earlier group of tenements.

Located between 77th and 78th Streets, the Cottages and Garden site is slated to be integrated into a new condominium by Trevor Davis, Aby Rosen and Michael Fuchs, but the community is requesting a hearing before the Landmarks Preservation Commission, hoping to stop the construction and obtain a Landmark designation.

The ability to have large retail windows and space along Fifth Avenue was quite valuable even in the 1920's - the December 1931 Architecture and Building cites $3,000 a front foot for the property - so by placing the major structural columns five feet in from the property line, Faile allowed for a column-free retail expanse, while supporting the eight floors of office space above.

The engineer also created an indented light court into which the office part of the structure could be expanded, if necessary.

The incorporation of another four-story structure along 49th Street in 1965 created a total of 161.6 feet running west along 49th Street, and 70 feet of facade along Fifth Avenue.

All the lower retail stories are fronted by a curtain wall of glass and Vermont verde antique marble, and the building is entered through double Herculite glass doors with Dover cream marble trim, echoing the color scheme of the Reinhardt gallery's original building.

During a 1965 remodeling by Lester Tichy, the second story received a bronze metal screen and was changed from retail to office use. While the office use remains, during a first and second story exterior renovation approved by the Landmarks Commission in 1997, the bronze screen was removed and new plate glass windows and aluminum mullions were installed.

The upper stories are complemented with horizontal bars of Dover cream marble and other horizontal design elements. The verde marble is also used on the utility room and the penthouse - where Goelet eventually had his offices and a residence.

The Goelet crest of swans and entwined "G's" can be found as design elements along the facades.

In support of its 1992 designation, the Landmarks Preservation Commission wrote, "Thus the structural two-in-one framing of the Goelet Building was a synthesis of the requirements of stores and offices, a reflection in steel of Fifth Avenue's vigorous though fickle economics."

Those same economics today will provide the lucky bidder with cash-flow and a colorful, historical property.

Area brokers believe the new lease-owner could obtain control of the property at some point in the future.