A godsend for church
Develop deal resurrected
THE Calvary Baptist Church at 125 W. 57th St. needed a miracle after the pandemic appeared to doom plans for a mixed-use tower that would give its congregants a desperately needed larger house of worship.
Now, after a construction lender pulled out in March 2020, the project has been born again — thanks to the deeply committed partnership of the church, developer Alchemy Investment Partners and its financial partner, Cain International.
Calvary gave the developers time and flexibility to restructure the financing when a loan agreement broke down in March 2020 and the lending market was frozen.
After months of patient strategizing, Cain was able to tap a new funding source from an affiliate, Security Benefit Life, which holds the senior mortgage. The result: Alchemy and Cain finally closed last week on the stalled purchase of the church-owned property between Sixth and Seventh avenues. The roughly $120 million buy is part of an overall project cost of $350 million.
Now, one year later than first planned, demolition is to start in the fall and vertical construction early in 2022. The new, 26-story, 440-foottall boutique office building — which will include the church’s new home — is to be completed in 2024.
The church had urgently needed $15 million to $20 million to modernize its facilities. It was introduced to Alchemy several years ago by FX Collaborative architect Dan Kaplan, who is designing the new building.
“We had worked with other religious institutions,” Alchemy principal Ken Horn said.
The church worked closely with Alchemy and Cain on the plans. A deal was announced in October 2019. Then an unidentified lender pulled out of the deal in late March 2020.
“No one panicked. We took deep breaths,” Horn said.
Alchemy managing partner Brian Ray recalled, “We worked feverishly through early 2020. We were ready to close in April. Then the pandemic hit. Our lender left us — ‘Sorry, guys, we’re not closing.’ They actually kept our deposit.”
The partners and the church were in shock. “They were well-known construction lenders,” said Cain senior managing director and head of US equity Eric Poretsky. “We had term sheets. We were ready to close.”
When the bad news came, “I got on the phone with the church,” Ray said. “They gave us an incredible set of time to regroup. We rolled up our sleeves, talked to appropriate lenders, and one Cain affiliate came in with the deal.”
The project posed other challenges as well. The church had to close down the dilapidated Salisbury Hotel, part of the building it has owned for more than 100 years, and the partners needed to decide what to build in its place. “Our instinct was not to go residential,” Horn said — despite the Billionaires’ Row location, where it’s bracketed by soaring condo towers One 57 and 111 W. 57th St.
Then, “It took a long time to get our plans through the Department of Buildings when nobody was working,” Horn said.
The firm construction timetable is a breakthrough for the two West 57th Street blocks between Fifth and Seventh avenues, where stores, restaurants and office towers stand side-byside with unsightly empty lots and empty buildings.
Cain will own most of the equity in the 260,000square-foot tower, which will have 185,000 square feet of office space, most of it with Central Park views. It will boast state-of-the art technology, 10,000-squarefoot floor plates, numerous outdoor terraces, a full amenities floor and 14.6-foot ceiling heights. Rents will top $100 per square foot.
Calvary Baptist Church will separately own its 180foot-high base portion of the building, which will double its current space and include a new auditorium and facilities for community and educational use.
“We are excited to see this project moving forward as the next chapter in our continued Christian ministry on 57th Street,” said Todd Williams, chair of the board of deacons. “This much-anticipated new facility will provide a larger, flexible and welcoming space for the congregation, the city and beyond.”
The Midtown market’s future is uncertain. But Poretsky said, “New York City’s rebound was never in doubt in my mind . . . The market is starved for this project.”