Holy Cow! Downtown’s Biggest Leasing Challenge

sapir 2 james hamilton Holy Cow! Downtowns Biggest Leasing ChallengeJust as workers were milling about 100 Church Street’s famously gaudy lobby at lunch hour on Aug. 26, an official from the Department of Buildings began plastering two violation notices in the windows of Bank of America on the ground floor. The citation faulted “signage,” in this case a racy advertisement for a teenage television series stretching around the corner of Church Street onto Park Place.

The violation was a minor incident compared to the problems that 100 Church has encountered since the autumn of 2001. But it was a fitting end to a particularly bleak week for a building that has been plagued with bad luck.

The day before the DOB’s ill-timed citation, The Observer broke the news that the Sapir Organization had handed over to one of its creditors, SL Green, the management and leasing duties of the 21-story office tower.

Later that afternoon, Crain’s reported that SL Green was foreclosing on 100 Church and had scheduled a private auction for Oct. 15. In 2009, SL Green and Gramercy Capital purchased the bulk of the building’s $85 million mezzanine debt from Sapir’s primary lender, Wachovia. (The Sapir Organization declined to comment for this article and SL Green declined to answer questions about the auction.)

Sapir is not the first developer to default on its loan payments this year, nor is 100 Church the only building to be put on the auction block. But few other commercial properties have such a fraught history.

 

A BIG, BOXY, glassy structure that occupies one square block of the Financial District, 100 Church was designed by the prestigious firm Emery, Roth & Sons and finished in 1959. Sapir, led by father and son Tamir and Alex Sapir, bought the 1 million–square–foot building in 1997 for $55 million, according to CoStar. Its previous owner, the Church Madison Corporation, filed for bankruptcy in 1994, according to city records.

Since the tower fetched nearly twice that in 1984, it looked like a good deal for the Sapirs. The New York Times reported in August 1984 that Larry Silverstein’s former brother-in-law and partner, Bernard H. Mendik, paid $116.5 million for 100 Church in a joint venture with the Equitable Life Assurance Society of the United States and the investment banking firm of Allen & Company. Mr. Mendik told The Times that he’d be able to spruce up the shabby tower in three months. “If I have the opportunity to convince tenants that a used Rolls is better than a new Cadillac, I’ll get them,” he said.

At first it looked like the Sapirs’ gamble might pay off. In 1998, Bank of America signed a $65 million lease for six floors.

Then came Sept. 11, 2001. The building was only a few blocks north of the World Trade Center, and the attacks triggered an exodus from 100 Church.