Durst, bank in discussions for 42nd Street tower

Real Estate Weekly, June 4, 2003 by Barbara Nelson

Bank of America and the developer Douglas Durst are discussing a joint venture to erect a $1 billion tower on 42nd Street near the Avenue of Americas.

The bank, that would be a partner in the project, would occupy half the 2 million SF of space in the building, making the offices its New York corporate headquarters, according to The New York Times.

The proposed project speaks to the tenacity of real estate developers in New York City especially to build in challenging economic times, said real estate professionals.

"I think it's a very positive thing for New York City," said David Levinson, vice-chairman of Insignia ESG. "A lot of great buildings get built in challenging times. You think about Rockfeller Center that was built during the depression."

Although empty office space abounds in Manhattan, real estate leaders say by the time the building is finished in approximately five years, economic times may have changed.

"They certainly don't need 1 million SF of office space on the market today, but by the time it's finished we very well may need that space," Levinson said.

Within one block of Durst's site, Boston Properties lost its anchor. tenant last year and is still trying to fill Times Square Tower, a 47-story building with 1.2 million SF under construction on 42nd Street. Canadian Imperial Bank is also struggling to fill its 35story office building currently under construction at Madison Avenue and 42nd Street.

Mortimer Matz, a spokesperson for the Durst Organization, said that they would like to see the block developed and even though there is interest by the Bank of America in a consolidated location in New York City, there is no announcement that is warranted or forthcoming at this time.

Bank of America is researching other alternatives in Manhattan, according to company officials.

"We've been exploring several options to . address our real estate needs in the New York City area," said Tara Burke, spokeswoman for Bank of America. "We've also had discussions with New York City and New York State relative to those needs."

Durst, who currently owns several skyscrapers in Manhattan, controls 90% of the land of the future site.

A group led by Joseph Bernstein owns an L-shaped parcel fronting 42nd Street and the Avenue of Americas. The other parcel that fronts 43rd Street is owned by Susan Rosenburg, who wants to hold on to the building where her late father, Harry Goldberg, opened a pawnshop in 1948, according to the New York Times.

However, the state is considering condemning the block, which would partially clear the way for Durst to '-begin the project. The state would. control the land and lease it to the bank and the developer. Durst's other hurdle is acquiring permission from the New York City Landmarks Preservation Commission to move Henry Miller Theater from the middle of the block west to Conde Nast Tower also built by Durst in 1999.

Previous attempts to build on the site by the Durst family in the past have failed. Companies that were considered included Morgan Stanley, Chemical bank, NASDAQ, L'Oreal and Zurich insurance.