On Monday night, the bright, rain-streaked MetLife clock had just struck midnight and the streets were still crowded with Flatiron revelers when The Observer stood gazing at One Madison Park. The 60-story obelisk rose darker than the sky, with only a single light burning on the 25th floor, until it too went out.
The clock also ticks for Ziel Feldman. The mid-tier developer emerged out of nowhere last month, the leading bidder in a bankruptcy auction for the lone sliver puncturing the cityscape at 23rd and Madison, agreeing to pay a reputed $165 million. But before he can, Mr. Feldman must present his final rescue plan for the tower to a bankruptcy court by early June, sources say.
With a rare location in up-and-coming midtown south, an unfinished pool and health club, views down to the water (on both sides) and luxury pre-Lehman finishes in every unit, One Madison Park should be one of the city’s most desirable properties. The arithmetic is nonetheless fiscally suicidal: millions in renovations in addition to the $165 million sales price; dozens of pending lawsuits; and an anticipated two-year wait before the tower is finally finished. To make a profit, Mr. Feldman would need to fetch $2,500 a square foot on average on the condo sales-as much as the swankiest downtown properties like 40 Bond Street, and close even to prices in prizes like the Plaza.
The local housing market is on the rebound, shifting the odds in his favor. But few top industry sources would speculate as to whether Mr. Feldman can meet the deadline and, even more daunting, succeed in turning around the city’s most troubled tower. That’s because, despite his high-profile buy, few have heard of him at all. “I had to play your message twice,” said one legal source who has followed One Madison Park. “Because I wasn’t actually sure I’d heard that name before.”
Among others, he’s won recognition without respect. “He is not a developer,” said a real estate source who has worked with Mr. Feldman. “He is an opportunist.”
Amid a certain B-list crowd, Ziel Feldman still cuts a fine figure.
During the recession of the early 90′s, the square-jawed native of Kew Gardens, Queens, a graduate of Queens College and Benjamin N. Cardozo School of Law, left his job as a successful real estate attorney. According to legend, within a few years, he amassed a staff of 20, who perched at $39 folding tables in a second-floor office on 42nd Street the size of a bachelor pad.
Around that time, Mr. Feldman met Gary Barnett, who had made a fortune in the diamond trade. “He was the experienced real estate guy,” Mr. Barnett said of his partner back then. The pair bought walk-ups, then elevator buildings, then, most notably, the Belnord, an aging Upper West Side dame near the Apthorp. They managed to turn the former West 86th Street home of actor Zero Mostel, writer Isaac Bashevis Singer and jazz impressario Art D’Lugoff into a more successful version of that troubled neighbor.
“We haven’t been partners for quite a number of years,” Mr. Barnett said. “But I wouldn’t hesitate to do something else with Ziel.”
Mr. Barnett went on to become one of the city’s most powerful developers-he of the Ariel, the Rushmore, the under-construction Diamond Tower and more-while Mr. Feldman remained comparatively small time. During the subsequent years, he would spar vigorously for assets that few cared about, such as the ambling, million-square-foot Herald Towers, which he won in a lawsuit.
Almost no one noticed when a couple of years ago he notched a tiny boom-time coup with 823 Park Avenue, a completely refurbished pre-war condo with a mere 10 full-floor units. Boasting a grand Candela layout and the rare status as a condo on Park Avenue, it wasn’t ambitious, but it was perfect. In the dying days of the boom, units sold for more than $2,000 a square foot.
It gave Mr. Feldman a taste for luxury, but it doesn’t necessarily presage success at One Madison Park.
“What 823 Park had in its favor,” said Brown Harris Stevens’ John Burger, who brokered millions of dollars of sales in the building, “was the scarcity value. There’s always a glass tower in an up-and-coming location. To me, something like 823 Park Avenue had it all: the prewar structure, albeit modernized, in the perfect location.”
In other boom-time ventures, Mr. Feldman also failed, sometimes spectacularly-for instance, on a South Carolina amusement park that he built for $400 million with a partner during the recent boom and then sold in bankruptcy court for just $25 million. But he succeeded enough to buy a Gothic mansion in New Jersey, now on the market for $15.9 million, and to move his new company, HFZ Capital Group, to a 29th-floor Madison Avenue office.
But not enough-so far at least-to make Big Real Estate’s A-list.
Still, he tries. Mr. Feldman has since November rolled the dice on the city’s three riskiest developments: with backing from a range of Israeli investors, he’s bought the infamous “collapsed-crane project” on East 51st Street; the posh, lawsuit-riddled Setai condo conversion downtown; and now possibly One Madison Park.
“He’s definitely done distressed projects before,” Mr. Barnett said. “But these have a more substantial development component.”
While Mr. Feldman was making all the right moves at 823 Park, two amateur developers from Rockland County bought a not-quite-as-desirable plot of land at 23rd Street and Madison Avenue. With barely more than spare change and plenty of financing at cheap rates, Ira Shapiro and Marc Jacobs built a big condo tower, incongruously sleek and tall for the northern reaches of the Flatiron district, but perfectly ballsy for the boom-time ethos.
Then the loans came due and the Rockland County boys vanished as players. The tower remained. Dust collected on its shimmering glass windowpanes, pyramids of cardboard boxes sat unopened inside empty units. More worrisome, interest accumulated on the sizeable debt, and the lawsuits-from neighbors and would-be residents and retailers like McDonald’s-piled up too.
Dozens of the country’s most moneyed developers are said to have toured the tower between then and earlier this year. Were it not for the lawsuits and the tower’s rep as the most troubled in the city, the shiny condo in the heart of midtown south could easily fetch well into the hundreds of millions. But in the end only two buyers lunged publicly: Bruce Eichner (who also paid $5 million for a deeply discounted four-bedroom spread in the building) offered to pay $40 million for the dubious prize and to finish the tower. He wrestled Austrian-Kurdish mystery man Cevdet Caner for months in bankruptcy court, after main lender iStar moved to foreclose. But all blinked at the ultimate $165 million price.
“It’s not a function of lost interest,” Mr. Eichner told The Observer. “It’s a function of numbers. You’re a pragmatic, thoughtful person; reasonably diligent, reasonably knowledgeable, and if you piece together a picture of numbers that’s not attractive, you lose interest.” Well, not entirely. “If this thing fell apart,” he conceded, “I’d bid at a number that’s materially different than $165 million.”
Mr. Feldman is unfazed. “Ziel is a very dynamic guy,” said Robert Knakal, chairman of brokerage Massey Knakal Realty, who worked with him on several sites. “He’s become one of the most active developers in town.”
If Big Real Estate has learned anything from the past few years, it’s that buying boldly to turn around a property doesn’t guarantee a financial mother lode. “He’s done a number of deals over the past few years that fit a similar profile,” said Ben Thypin, a top analyst at Real Capital Analytics, citing the Setai and a brown plot of land on Bryant Park that Mr. Feldman is poised to flip for a tidy profit. Yes, but those are all just buys, The Observer noted. What about successful prior developments of the scale and challenge of One Madison Park? A pause. “That’s not clear,” Mr. Thypin said. “I haven’t heard anything about him prior to these couple of years.”
Corcoran’s Tamir Shemesh, who was the exclusive broker at One Madison until sales were frozen due to the foreclosure, said he’s spoken with Mr. Feldman at length about the project, in which only 12 units have closed, and he’s confident they could achieve prices into the mid-$2,000s a foot. The circumlocutious catch: “Having the building free and clear of any issues and problems, and being able to finish the lobby, finish the amenity floors, such as the pool and gym, delivering the building and with the state of the market today,” he finally finished, “the developer will be able to achieve that price.”
Mr. Feldman declined to comment for this story until the legal case is resolved. Meanwhile, the mid-size developer with the rapacious appetite could within weeks take over the city’s most noisome project. Further proof? The tower’s slogan from years ago drifts into our heads like the lyric from a bad pop song: “It’s not lonely at the top. Just very exclusive.”
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