A troubled Midtown development project is officially back on track, with a new developer in charge.
Rabina Properties has closed on its joint-venture agreement with Ceruzzi Properties and SMI USA to develop a 76-story mixed-use project at 520 Fifth Avenue, the New York Post reported. The Real Deal first reported on the agreement in May.
Sources told the Post that the deal consists of a “partnership restructuring and recapitalization.” In May, Ceruzzi president Art Hooper told TRD that “Rabina’s going to be running this deal” and that the original partners would “be in the back seat.”
The roughly $232 million owed to Mack Real Estate, which has considered its debt to be in technical default since the sudden death of Lou Ceruzzi in August 2017, has been paid off as part of the deal and will be replaced with new financing, sources told the Post.
Last week, Madison Equities’ Robert Gladstone sued Mack Real Estate, alleging that the lender backed out of a deal to sell the defaulted debt to Madison and give it full control of the property. Gladstone’s firm had been in talks to join the development in late 2018, but those negotiations fell through.
The development just north of Bryant Park is now expected to have more office space and less retail than originally planned, with luxury apartments at the top. [NYP] – Kevin Sun