Fashion designer Tommy Hilfiger has called off plans to purchase the Clock Tower, the landmarked office tower overlooking Madison Square Park. Hilfiger had planned to convert the tower into a luxury hotel and condominium.
Hilfiger, along with partner JSR Capital, a real estate investment company, wanted to redevelop the 41-story tower located at 5 Madison Avenue into what would have been the preppy designer's first-ever hotel project. According to published reports, the partners were in contract to buy the 267,000-square-foot property for $170 million from Africa Israel USA. Sources said the deal fell apart because the would-be buyers had trouble raising the needed funds.
JSR Capital, however, insisted that there were other reasons for walking away from the deal.
“Virtually everyone in the real estate business has looked at Clock Tower as a hotel, residential, and/or office,” said Ari Schwebel, vice president of operations at JSR Capital. “Some of those were even all-cash buyers. There are reasons not one of them has closed on the building, and it isn't about financing.”
In 2007, Manhattan's largest landlord, SL Green Realty Corp.—along with partners RFR Holdings and hotelier Ian Schrager—sold the Clock Tower to Africa Israel for $200 million. SL Green, which had owned the tower for just two years, had planned its own luxury residential conversion of the property but instead decided to sell. Africa Israel then had plans to redevelop the tower into a 55-unit, high-end condo designed by Versace, but later scaled down its plans by decreasing the size of apartments and hiring a lower-profile designer. In 2008, Africa Israel sold a 50% interest in the Clock Tower to an undisclosed entity.
Sources said a number of residential and hotel developers have a continued interest in the tower. Built in 1909 for Metropolitan Life Insurance Co., it functioned as the company's world headquarters until 2005. The tower held the title of world's tallest building until 1913, when it was succeeded by the Woolworth Building downtown.
Source: Crains New York