Speyer wins Chrysler bidding.
Speyer came out on top after negotiating with Fuji Bank for the $250 million face value mortgage and with Cooper Union to renegotiate the ground lease on which the 68-story tower stands.
The Chrysler Building measures almost 1.2 million square feet, while the Kent Building is 32 stories and approximately 550,000 square feet.
While no price has surfaced, estimates have ranged from $200 million to as much as $250 million, including the increase in lease payments.
The buildings, which comprise nearly the full block bounded by 42nd and 43rd streets, Lexington and Park avenues, came into play when then-Chrysler leaseholder Jack Kent Cooke died earlier this year while attempting to renegotiate his note with Fuji Bank. His estate later decided not to pursue ownership.
Speyer, who would not reveal the final price nor the terms of his lease with Cooper Union, says they began the negotiations with the city engineering school after the first round of bidding in October.
Robert Hawks, vice president of Cooper Union, said "Tishman Speyer's excellent record as developers and operators of large office buildings gives the Cooper Union confidence that they will invigorate and maintain the Chrysler Building in a superior fashion. The Cooper Union and the City of New York will be well-served by their involvement."
Hawks said the building's lease has been extended for another 150 years, through 2147. The terms and payments have also been increased, but not yet revealed.
Although the Chrysler Building is exempt from city property taxes so that Cooper Union can provide scholarships to all its students with the funds, that is transparent to tenants. The building participates in challenging its tentative property tax assessment and tenants make payments in lieu of taxes which go to support the school.
Speyer says he is examining possibilities for the Kent Building, which doesn't necessarily mean it will be coming down. That building is not on Cooper Union land but will be owned outright.
Fuji Bank was represented by Warren "Woody" Heller of Jones Lang Wootton and a closing is expected to take place early next year.
According to "The Architecture of New York City" by Donald Martin Reynolds, developer William H. Reynolds leased the land at 42nd Street and Lexington Avenue from Cooper Union in 1921 and commissioned William Van Alert to design an office building. Walter Percy Chrysler bought the lease in 1927 and, working with Van Alen, changed a planned dome to a peak.
At that same time, Reynold's former associate, H. Craig Severance, was working on the Bank of Manhattan Co. development at 40 Wall, and the quest skyward was closely watched by New Yorkers as the girders rose higher than the Woolworth Building, the reigning world's tallest since 1913.
Van Alen waited until after Severance topped off 40 Wall at 927 feet, with a flagpole designed to be two feet higher than the original Chrysler plans. Just before its completion in August 1930, Van Alert installed the Chrysler's "vertex," a 185-foot spire he had ferreted inside the uptown structure, topping it out at 1,046 feet. Speyer says he expects to spend $100 million on refurbishing the Chrysler Building, long known to be needing upgrades. No hotel will be part of his scheme, but he will be taking a look at what can be done with the long-shuttered Cloud Club.
"We're very excited and looking forward to renovating the building," he said, expecting that when complete, "The Chrysler Building is going to sparkle as if it were opening day. It is a beautiful building."
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|Title Annotation:||Jerry Speyer; Chrysler Building|
|Publication:||Real Estate Weekly|
|Date:||Dec 3, 1997|
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