SIBL to be a condo

Real Estate Weekly, Dec 4, 1991 by Lois Weiss

SIBL to be a condo

The movement of the Science, Industry and Business Library (SIBL) of the New York Public Library has taken a twist in ownership. The Library, which was to rent space from KMO-361 Realty Associates, the owners of the former B. Altman's Building and the developers of the 650,000-square-foot New York Resource Center, is now buying its portion of the structure, which will be divided into two condominium lots.

The library will be purchasing approximately 200,000 square feet on the Madison Avenue side, from the basement through sixth floors, and may take a portion of the seventh floor as well. As a not-for-profit private corporation, the purchase will allow SIBL to be exempt from real estate taxes. As a tenant, SIBL would probably be subject to real estate tax escalations on its portion of the building.

Savings for the Library would be substantial, particularly once it vacates its current rental space at other locations and consolidates at its new home.

Richard P. Steinberg, president of the Resource Center, said they do not anticipate any benefits, in the way of real estate tax savings, for their remaining portion of the building.

Betsy Cahill, a spokesperson for the Library, said the deal is not complete yet and there are still details to be worked out. "We hope to have papers by the end of January," she said, "But we are still in the midst of negotiating."

In order to finance the $80 million project, she said, the Library has raised $18.5 million in government grants, which includes a $10 million commitment from city, $7.5 million from the state and $1 million from Congress. Another $6.5 million from the public sector and $30 million from the private sector must still be raised while an additional $25 million will come from a reallocation of services, Cahill explained, including the savings from selling or leasing The Annex and moving out of other space that is currently leased.

In order to go ahead with the project now, the Library has obtained a $55 million bond issue from the Dormitory Authority. This is supported by $25 million in guarantees made by 25 to 30 corporations and individuals. "The guarantees are assuring the Library, not the bondholders," Cahill stressed. "They are backing us if we are not able to raise the money or default on the loan." The guarantee program will later be replaced by private funds.

Resource Center Project Manager Daniel P. Weinreb said they are making headway with prospective tenants. "Discussions are underway with important tenants for significant space in both contract and residential furnishings," he said.

Steinberg said they will probably announce a group of tenant signings at one time.