In what may be a sign of further distress in the Lower Manhattan real estate market, a vacant lot in the Financial District is moving toward foreclosure. In a development first reported by Crain’s New York, the site of a planned hotel at 140 Fulton Street (rendering at right) is in the first phases of being taken back from developer Hidrock by lender Bank Hapoalim.
The site, between Broadway and Nassau Street, was announced in 2019 as the home of a new, 41-story hotel, which was to be branded under the Tempo by Hilton flag. But the pandemic brought business travel to a near halt, which amounted to a cataclysm for the hospitality industry. In court papers, Bank Hapoalim says Hidrock has defaulted on more than $30 million in debt on the property, where ground has yet to be broken on the hotel project.
This comes in the wake of numerous other foreclosure moves against local hotels. The world’s tallest Holiday Inn, located at 99 Washington Street (corner of Rector Street) defaulted on multiple notes starting in August 2021. Chinese developer Jubao Xie subsequently missed several payments on $87 million in debt secured by the property, which he was trying to sell for $187 million. This price also represented a steep discount from the $300 million asking price at which he tried to sell the hotel in 2017. The missed payments led bank Wilmington Trust to foreclose in March of this year on a $137 million loan, which was secured by the 50-story structure.
Above: Holiday Inn at 51 Nassau Street. Below right: Moxy hotel at 143 Fulton Street. Below left: Holiday Inn at 99 Washington Street.
The developers of the Moxy NYC Downtown, located at 143 Fulton Street, surrendered possession of the property to their mortgage lenders, AllianceBernstein, in May 2021. That came on the heels of developer Leonard Stern deciding several months earlier to hand the keys to a pair of Downtown hotels—the Roxy and the Soho Grand—over to lenders, rather than continue making payments on a $100-million mortgage. Prior to that, in January, 2021, a pair of Lower Manhattan hotels—the 113-room Holiday Inn at 51 Nassau Street and the 112-unit Holiday Inn Express at 126 Water Street—was auctioned off to the highest bidder, after the holding company that owned the properties was unable to keep current on $385 million in debt.
And the Downtown Alliance’s Lower Manhattan Real Estate Market Report for the first quarter notes that the Annaly Commercial Real Estate Group is moving to foreclose and take possession of the 253-room Andaz Wall Street, at 75 Wall Street, from the Hakimian Organization, while the 492-room Holiday Inn at 99 Washington Street went into foreclosure in April.
Even before the national and local economies stalled, as a result of the pandemic coronavirus, the hotel business in Lower Manhattan had begun to show signs of trouble. The Ritz-Carlton Battery Park (at Two West Street) opened to much fanfare in 2002, but was never able to turn a profit. Sold to a new operator in 2018, its name was changed to the Wagner. That hotel closed during the pandemic, and never reopened. (The current owner is hoping to exit the hotel business entirely, by seeking permission to convert the structure into apartments.)
Unlike the Wagner, many local hotels have now partially reopened, but several appear unlikely ever to recover. This market trend is driven, in part, by a factor that predates the pandemic: By any reasonable yardstick, the hotel sector in Lower Manhattan has been drastically overbuilt—the result of nearly two decades of giddy speculation by developers. In the years leading up to the terrorist attacks of September 11, 2001, visitors wishing to stay in Lower Manhattan had essentially three choices: the Marriott World Trade Center Hotel (destroyed when the Twin Towers collapsed), the Marriott World Financial Center Hotel (now known as the Marriott Downtown, on West Street), and the Millennium Hilton Downtown Hotel (on Church Street, opposite the World Trade Center complex).
Holiday Inn Express at 126 Water Street.
Today, there are more than three dozen hotels operating in the square mile below Chambers Street, offering more than 8,000 rooms. An analysis by the Downtown Alliance indicates that more than a dozen new hotels, containing several thousand more rooms, are currently under construction or in the planning stages.
What might become of such projects, if they prove financially unworkable, is not clear. It is possible (although expensive) to convert hotels into apartment buildings, but a twin glut of residential development is also cresting in Lower Manhattan at the same time. Such a crisis may also create opportunity, however, for community leaders who have long bemoaned the critical shortage of affordable housing in Lower Manhattan. If even a significant fraction of the local hotel inventory were to be adapted for residential use (as was proposed, in completing plans by former Governor Andrew Cuomo and former Mayor Bill de Blasio), this process would likely create a thousand or more new apartments. A campaign to enact incentives for developers to set aside at least some of these units as affordable dwellings could mitigate some of pricing pressure suffered by longtime residents in recent years.
An Aptitude for Apps
Lower Manhattan College Awarded National Science Foundation Grant
The Borough Manhattan Community College, headquartered in Tribeca, has received a $600,000 grant from the National Science Foundation to develop academic courses that will train students with technical skills in advanced mobile app programming and development. The industry of creating apps for mobile devices has exploded over the last decade, and is expected to generate $935 billion in annual revenue by next year. Read more…
Weir Still Waiting
City Hall Demands Fed Funding for FiDi & Seaport Resiliency Plan
Mayor Eric Adams is pushing the administration of President Joe Biden to provide $8.5 billion in federal funding to advance a suite of ten resiliency projects throughout the five boroughs of New York City. Among these is the Financial District and Seaport Climate Resilience Master Plan, which was unveiled in January, and for which funding has not been allocated. Read more…
Eyes to the Sky, November 2-7, 2022
Planet Mars joins brilliant planet Jupiter and yellowish Saturn as an all-night planet during the coming fortnight. The Red Planet rises in the east-northeast around 8:20 tonight and an hour earlier in mid-November.
The moon is our guide to locating our solar system neighbors. Find Saturn above the half moon on November 2. On November 4, the moon travels the sky close below Jupiter and, on November 10 and 11, the waning gibbous moon appears in the vicinity of Mars.
Of quotidian concern to all regional Earthlings: Eastern Daylight Time falls away overnight November 5 to 6. Set clocks back one hour to awaken on Sunday the 6th to Eastern Standard Time (EST).
Look for a special Eyes to the Sky in the BroadsheetDAILY this Monday, November 7, about viewing the upcoming lunar eclipse.
Guest artists ChamberQUEER will present historically underrepresented queer figures in classical music. More details will be announced soon!Crumb: Vox Balanae, Four Nocturnes; and Higdon: Little River Songs. Free.
Opening day of the annual design competition that challenges teams of architects, engineers and contractors to build sculptures made entirely out of unopened cans of food. The large-scale sculptures are displayed at Brookfield Place and later donated to City Harvest to help provide families with a holiday meal. Through November 14.
The Noir Pairings hybrid film series pairs a neo-noir with a classic noir movie for comparison and discussion. In Le Cercle Rouge (1970) directed by Jean-Pierre Melville, ex-convict and master thief Corey crosses paths with a notorious escapee and an alcoholic former policeman. The trio proceed to plot an elaborate heist at a jewelry store in Paris. This film is paired with The Asphalt Jungle (1957), available on-line. Free popcorn will be served, and a discussion will follow the screenings.
Shanghai Sonatas is a new musical about the Jewish refugee musicians from Nazi Germany who brought classical music to Shanghai, and their connection to the millions of classical musicians of Chinese descent today. Free.
Reading. An unexpected, poignant, and personal account of loving and losing pets, exploring the singular bonds we have with our companion animals, and how to grieve them once they’ve passed. RSVP required.
Lower Manhattan Greenmarkets
Greenwich Street & Chambers Street
Wednesdays and Saturdays, 8am-3pm (compost program: Saturdays, 8am-1pm)
Bowling Green Greenmarket
Broadway & Whitehall St
Tuesdays and Thursdays, 8am-5pm (compost program: 8am-11am)
The Outdoor Fulton Stall Market
91 South Street, between Fulton & John Streets
Indoor market: Monday through Saturday,11:30am-5pm
CSA pick-up: Thursday, 4pm-6pm; Friday, 11:30-5pm
Outdoor market: Saturdays, 11:30am-5pm
Today in History
On this day in 1947, the H-4 Hercules, better known as the Spruce Goose—the largest fixed-wing aircraft ever built—took its only flight, with designer Howard Hughes at the controls. The Spruce Goose was a flying boat designed and built by the Hughes Aircraft Company, intended as a transatlantic transport for use during World War II. Skeptics did not believe it could fly. The Howard Hughes Aircraft Company evolved into today’s Howard Hughes Corporation, which owns properties in the Seaport District in Lower Manhattan. Only one Spruce Goose (built of birch, not spruce) was ever produced. It is on display in McMinnville, Oregon. Length: 218 ft 8 in. Wingspan: 320 ft 11 in. Height: 79 ft 4 in. Fuselage height: 30 ft.
1675 – Plymouth Colony governor Josiah Winslow leads a colonial militia against the Narragansett during King Philip’s War.
1889 – North Dakota and South Dakota are admitted as the 39th and 40th U.S. states.
1947 – Howard Hughes performs the maiden flight of the Spruce Goose or H-4 Hercules. With Hughes at the controls, the Spruce Goose flew just over one mile at an altitude of 70 feet for one minute. The flight proved that the gigantic machine could fly—but it never flew again.
1984 – Velma Barfield becomes the first woman executed in the United States since 1962.
1993 – Rudy Giuliani wins the New York mayoral election, becomes first Republican mayor since 1965
2000 – The first crew arrives at the International Space Station.
1734 – Daniel Boone, American hunter and explorer (d. 1820)
1755 – Marie Antoinette, Austrian-French queen consort of Louis XVI of France (d. 1793)
1795 – James K. Polk, American lawyer and politician, 11th President of the United States (d. 1849)
1865 – Warren G. Harding, American journalist and politician, 29th President of the United States (d. 1923)
1961 – k.d. lang, Canadian singer-songwriter, producer, and actress
1887 – Jenny Lind, Swedish operatic soprano (b. 1820)
1950 – George Bernard Shaw, Irish author, playwright, and critic, Nobel Prize laureate (b. 1856)
1990 – Eliot Porter, photographer, chemist, and academic (b. 1901)
2004 – Theo van Gogh, Dutch actor, director, and producer (b. 1957)
2018 – Roy Hargrove, trumpeter, dies of kidney disease at 49