Amazon echo

Fiasco reminiscent of old Bronx tale

IT’S

déjà vu all over again. A decade ago, The Bronx was poised for the retail redevelopment of the Kingsbridge Armory by Related.

There were many neighborhood critics, including unions, at the time.

Despite Related being willing to pay its own employees more, it could not force the future stores to pay the demanded $10, and then $11.50, per hour.

Borough President Ruben Diaz Jr. railed against the plan, stating in effect that no jobs were better than low-paying jobs.

Today, there are still no jobs as a skating rink first proposed in 2013 is not yet open. Eventually, it will generate 267 jobs.

Mary Ann Tighe, CEO of CBRE’s tri-state region, recalled the Bronx drama last week as Amazon was driven out of town.

“Instead of hundreds of jobs, there are none,” she said of the armory. “It was horrible for The Bronx but it wasn’t a failure on a national level. The Amazon deal was a failure on a national level.”

The politicians misunderstood the Amazon deal, she explained. “No one was writing a check,” she said. “They f irst had to generate the jobs and the taxes.” The majority of the incentives were also as-ofright for any company coming to the area.

“The politicians were more interested in soundbites than substance,” Tighe added, complaining, “We put people in positions of authority who aren’t doing their homework. It’s governing by slogan and not thoughtful.”

Tighe also observed that those complaining that expanding companies like Google and Facebook aren’t getting subsidies don’t understand they are not getting them because they are in desirable parts of Manhattan, “and not pioneering a new neighborhood.”

In addition, Tighe is concerned about the rising number of City Council and state proposals that play to the voter but will make it more costly and difficult to do business in the city and hurt the tax base.

“There is no question it’s a complex city,” she added, “but first start with doing your homework, and don’t govern by slogan.”

The CMBS loan backing Lever House at 390 Park Ave. lost $68.3 million, the financial advisory firm Trepp reported on Tuesday.

The loan was sold for $12.8 million, below the most recent valuation of the “collateral” of $14.9 million and down from $150 million in 2005.

“This has value from a nuisance point of view, and someone could come in and buy [the lease] for $20 million,” suggested Manus Clancy of Trepp.

The buyer of the loan — an entity of the Ramsfield Hospitality Finance — is believed to have purchased it as a white knight to Aby Rosen and Michael Fuchs’ RFR Holding, which owns the ground lease and operates the building.

Ramsfield was launched in 2003 by Richard Mandel, the former president of Kennedy Wilson’s commercial investment sales division.

The loan loss relates to a looming rent reset in 2023 that would hike the yearly tab from $6 million to around $20 million to be paid to the Korein family landowners. The real estate taxes run around $9 million a year.

Once pencil pushers determined the landmarked building’s income was unlikely to cover the new rent, it set the stage for a default on the loan that was due in 2015. This made the 2005-era loan “virtually impossible to refinance,” Trepp wrote.

At the same time, occupancy plummeted and prospective tenants avoided the world-renowned property given the uncertainty of the ground lease.

Worse, the Korein family was angry over interactions at another building and wouldn’t renegotiate the ground lease rent with RFR.

Thinking RFR was about to be foreclosed, the Korein family wrote a second ground lease to a Brookfield/Tod Waterman partnership designed to kick in once RFR was gone.

But if RFR can now redevelop and financially invigorate the property to cover the new rent, whether as office or hotel or otherwise, Brookfield and Waterman may have a very long wait — or they could pay Ramsfield and Rosen to go away.

It is unlikely that Rosen would take an offer if he has a redevelopment plan, given his obsession with art, restaurants and landmark properties, such as the Seagram Building, which RFR also owns, and the Casa Lever restaurant and art installations in 390 Park Ave. But cash is king, and everyone has his or her price. Stay tuned.

Chef Nusret Gökçe, known to foodie fans as Salt Bae, will open a new burger joint at 220 Park Avenue South with additional frontage and windows on East 18th Street.

Nusr-Et Burger will open later this year in 2,800 square feet on the ground and will have another 3,200 square feet on the lower level for storage and prep work.

Eric Gelber and Jordan Kaplan of CBRE represented Salt Bae, who also owns the chain of Nusr-Et Steakhouses.

CBRE’s Lon Rubackin and Michael Kadosh worked on behalf of the building owners, which had an asking rent in the $220s per square foot.