Gargano Wraps Up Milstein Site

The last remaining parcel in the 42nd Street redevelopment plan gets sorted out in the final days of the Pataki Administration.

Charles Gargano, chairman of the Empire State Development Corporation, announced in a press release on Thursday that the deal with SJP Properties and Prudential Real Estate Investors, which purchased the Eighth Avenue corner from the Milstein family earlier this year, closed, and that it will be office rather than residential–a victory for Gargano and the logical choice for the developer as well, given that is where the demand is.

The new tower will be a million square feet, 40 stories tall, and no more than 600 feet high, according to ESDC spokeswoman Jessica Copen, which is lower than the new New York Times building to the south.

See jump for the full release.

- Matthew Schuerman

ESD CHAIRMAN ANNOUNCES SJP COMMITMENT TO CONSTRUCT MILLION-SQUARE-FOOT OFFICE TOWER ON WEST 42nd STREET’S LAST UNDEVELOPED SITE

Empire State Development Chairman Charles A. Gargano announced today that ESD has concluded a sale transaction with SJP Properties for the development of a million-square-foot office building on a long-vacant site at the southeast corner of 42nd Street and Eighth Avenue in Manhattan’s Times Square.
“I am pleased to announce another step forward in the transformation of 42nd Street,” Chairman Gargano said. “Manhattan’s office market is in need of new, state-of-the-art office buildings, and we applaud SJP’s commitment to create such space on the last undeveloped site within ESD’s 42nd Street Project. With the headquarters of The New York Times Company next door slated for completion in 2007, and with offices, theaters, movies, and restaurants already thriving in the area, the SJP building will be a welcome addition to the neighborhood. ESD’s redevelopment and revitalization of West 42nd Street will continue to provide New Yorkers and visitors alike with a world-class destination for working, shopping, entertainment, dining, and sightseeing for decades to come. This is a huge milestone and the realization of Gov. Pataki’s vision. Times Square has truly become, once again, the Crossroads of the World.”
“SJP Properties is pleased to be rapidly moving forward on this new one-million-square-foot office tower and we truly appreciate Empire State Development’s strong support in bringing this complex project to fruition in a timely manner,” said Steven J. Pozycki, Chairman and CEO of SJP Properties. “We look forward to breaking ground this summer and delivering a world-class office tower for commercial tenants by the first quarter of 2009. This project represents a remarkable opportunity to meet the unprecedented demand expressed by large corporations seeking state-of-the-art space in the midtown market.”
In July 2006, SJP TS, LLC, a joint venture between affiliates of SJP Properties and institutional investors led by Prudential Real Estate Investors (PREI®), purchased the property, which had been a parking lot, and then vacant, for more than a decade. SJP is expected to begin construction of the “spec” office building by the summer. The property will pay PILOTs equal to full taxes, and, like other office towers in the 42nd Street Project area, will pay a theater surcharge dedicated to the historic theaters located mid-block on 42nd Street, between Seventh and Eighth Avenues.
SJP Properties is a privately held, full-service real estate firm that owns and manages more than 14 million square feet of Class A office space with prestigious tenants such as Bayer AG, BMW, Citigroup, Ingersoll-Rand, Merrill Lynch, Sanofi-Aventis and Tiffany & Co. SJP’s award-winning portfolio of development projects includes high-rise commercial and residential developments and suburban commercial campuses throughout the metropolitan area.

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