Earlier this month, St. Vincent’s announced its plan to hire CB Richard Ellis to market the eight buildings that make up its Greenwich Village campus. The announcement came as a slap in the face to Bill Rudin, the developer whose family firm had a deal to buy some of the properties from the hospital before it went into bankruptcy.
Yesterday, the bankruptcy judge handling the case gave St. Vincent’s the necessary approvals to bring CBRE in as its broker and adviser. Such approvals are standard procedure for bankruptcy proceedings, but it also shows that no deal with the Rudins has yet been reached.
Just because St. Vincent’s is putting its property on the open market does not mean a deal cannot still be struck with Rudin Management. Indeed, the hard-won approvals the developer received from the city’s Landmarks Preservation Commission would make them the front runner in the bidding, presumably, because the task other buyers would face, of getting their own designs approved, would be costly, time-consuming and politically fraught.
Also, any new approvals would likely be smaller than what the Rudins received because their proposal was granted in partnership with the hospital. Convincing the commission to approve a 21-story apartment building in the generally low-rise neighborhood without the backing of a hospital or other community-focused instituion would be almost impossible. The community outcry before was deafening enough, even with the desire to keep St. Vincent’s open. Take that away, and all that is left is the outcry.
So it seems the Rudins still hold many of the cards. And yet, they have been negotiating for a lower price, which was originally set at $300 million. This runs contrary to the interests of the creditors who want top dollar for the hospital’s assets. This is prime West Village real estate, after all.
Even with the difficult approval process, and the difficult development climate at the moment, it seems hard to believe there will not be at least some interest in these properties. After all, one has already been sold on 15th Street, a staff residence that has been called one of the ugliest buildings in the city. It is being converted into rentals.
Maybe outside interest is exactly what St. Vincent’s is after, though. Not so much to find a new suitor as to create a bargaining chip in its ongoing discussions with Rudin Management.
We are awaiting responses to our calls to St. Vincent’s and Rudin Management.
UPDATE: It turns out the parties are still very much in conversation, according to both sides, and the property is not yet officially on the market — though that by no means prevents others from making an offer, either.
In an email, Rudin COO John Gilbert writes: “The Rudin family is in negotiations with Saint Vincent’s to develop a solution that benefits creditors and the community, while ensuring the delivery of health care to the people of Greenwich Village.”
And St. Vincent’s emailed over its own statement about the hiring of CBRE, which also noted the ongoing negotiations:
“Saint Vincent’s is exploring all options available regarding the Manhattan campus to maximize value for all of its stakeholders.” said Mark Toney, chief restructuring officer of Saint Vincent’s.
St. Vincent’s appreciates the creditor’s support of our process and the court’s approval of CBRE.
“The property, which occupies eight buildings on the Lower West Side of Manhattan, represents a significant source of value for Saint Vincent’s bankruptcy estate,” Toney said.
In exploring viable options, St. Vincent’s continues to negotiate with Rudin Management for acceptable terms of the previous agreement.