Isaac Hera’s Yellowstone Real Estate Investments is planning to bring a hotel to Times Square, but there are two noteworthy obstacles already in its path.
Yellowstone filed plans this week for a 265-key hotel at 220 West 42nd Street in the heart of Manhattan, Crain’s reported. The hotel would occupy the upper floors of the 24-story mixed-use building, floors that have been vacant for years since previously serving as office space.
In its filing, Yellowstone said its proposal “would revitalize a vacant office building with an active hotel and retail use that would enliven this block.” The ground-floor retail space housed a bustling McDonald’s until 2020, but it’s unclear what Yellowstone plans to do with the space.
The company did not respond to a request for comment from Crain’s.
Yellowstone acquired the property, also known as Candler Tower, in 2022 via a deed-in-lieu of foreclosure that valued the property at $161.1 million. UK-based investment firm EPIC had owned the property since 2012, when it acquired it from Paramount Group for $261 million.
Months before Yellowstone’s acquisition, it purchased the $150 million loan that M&T Bank issued in 2017 to refinance the historic building. That deal paved the road for Yellowstone’s acquisition of the property.
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There are two factors that could impede upon Hera’s plan. The first is that the property is housing nearly 1,100 migrants who have a right to shelter. There are hundreds of migrant shelter sites across the city, but relocating more than 1,000 people could be challenging.
Another challenge could rise from the requirement for developers to secure special permits for hotel projects, a measure implemented in a 2021 law hailed by the Hotel Trades Council as an effort to halt non-union hotel developments.
The law has had a chilling effect on new projects in the city, which may force a shortfall of 52,000 hotel rooms by 2035, according to the Planning Department. Obtaining special permits has been near impossible for developers and no applications were even filed in the year after the law’s passage.