At least one and possibly all five towers at the massive Riverside Center development will not be the work of Pritzker Prize-winning architect Christian de Portzamparc. The French designer helped Extell Development and the Carlyle Group sell their swank plans' to the community and the City Planning Commission. The latter was so taken with the crystalline designs of Mr. de Portzamparc, who also designed the LVMH headquarters and Extell's One57 tower, that restrictive zoning covenants were set to ensure the buildings would look as promised.

But now, Extell and Carlyle have turned over one of their tower sites to the Dermot Company, which has hired local firm SLCE to design the apartment building on the West End Avenue section of the site. While Dermot insists its project will be up to the standards promised during last year's public review process, some, including the exacting City Planning chair Amanda Burden, worry the design doppelgangers will lead to lesser work.

“I am extremely disappointed to learn that the developer of Riverside Center has chosen not to retain Christian de Portzamparc as architect for this project," Ms. Burden said in a statement.

When Dermot came to the local community board last month to present its version of the designs, there was some disappointment that they had not been joined by Mr. de Portzamparc. "If you look at it, they're more usual, they've probably been value-engineered," Ehtel Shefer, chair of the board's Riverside Center working group, told The Observer in a phone interview. "I don't know if it's the feeling of the entire board, but certainly some people were disappointed."

Back in 2005, Carlyle and Extell bought the remaining undeveloped portion of Donald Trump's Riverside South development from his Hong Kong partners (to the consternation of Mr. Trump) for $1.76 million. Much of it has since been developed as new towers by Gary Barnett, Extell's principal, but the southernmost parcel had to be rezoned because previous plans called for a new television studio to be built on the site.

Instead, Mr. Barnett trotted out his plan for a 3.1-million-square-foot city within a city within a city designed by Mr. de Portzamparc. Five jagged towers were arrayed around three acres of open space. After much back-and-forth with Councilwoman Gail Brewer, the developers agreed to building 20 percent of the apartments as affordable housing and to include a school on the site.

When it came time to start building, Carlyle, which controls a majority stake in the site, decided to hold a competitive bidding process, to which Extell was invited but not guaranteed the chance to build the first tower. Instead, the prize went to Dermot. When it comes time to build the remaining four parcels, Carlyle expects to go through the same private bidding process.

Mr. Barnett said that given the large amount of affordable housing and the school in the first building, he was less interested in winning the project. He still hopes to take the lead on some, if not all, of the other development sites, though he acknowledged there was no guarantee any of the towers would be his to build.

"I hope we get to build some, but I don't know," he said. "If we do, I can tell you, Christian de Portzamparc will be our architect."

Carlyle declined to comment.

Councilwoman Brewer was ambivalent about the changes. "I was more concerned with the school and the affordable housing, but I can see why people might be angry about this," she said, adding that of Mr. de Portzamparc, "They certainly made a hard sell for him during the ULURP."

In a brief statement, Dermot principal and COO Stephen Benjamin, stressed that his tower was still under design and, given the zoning covenants, would still resemble what was originally proposed. “We are in the midst of the design process for a spectacular building that will be in full compliance with the zoning as is our obligation and right," Mr. Benjamin said.

Ms. Burden raised the same point in her statement, that even if the de Portzamparc name is not on the final buildings, his master plan for the site remains, and the essence of his work will persist.

"The integrity of de Portzamparc’s work will be maintained because key architectural features—including, among others, building silhouettes, distinctive sloped and angled sculptural  forms, facets and sloping tower tops—are embodied in the land use approval and are a condition of developing the site," Ms. Burden said. "De Portzamparc was instrumental not only in shaping the site but also in developing these design controls."

"The City Planning Commission fully understands that a developer may decide to change architects over time for a number of reasons," she continued. "De Portzamparc’s important contribution to this project will survive this developer’s decision to look elsewhere for design services."

This is not to suggest that SLCE is necessarily a worse choice as the project's architects, either. In fact, the firm is frequently brought on by developers to serve as the architect of record for more highfalutin designers like Mr. de Portzamparc.

The globetrotting architects (Gehry, Nouvel,Koolhaas and the rest of the designer jetset) are not usually experienced in the intricacies of jurisdictional buildings codes, idealized layouts and local tastes. It falls to firms like SLCE and Goldstein Hill & West—which has also done extensive work at Riverside Center and may well wind up designing some of these tower—to bring a strarchitect's dream into the realm of the buildable, the inhabitable, the comfortable.

That said, some connoisseur's counter that these firms' work can be pedestrian and developer-driven, lacking the flair of some of their more renowned rivals.

Neither is this switcheroo exactly new. That is a big part of the reason the City Planning Commission works so hard to ensure certain design flourishes and details in ambitious projects like the Riverside Center.

Mexican master Enrique Norten was originally pitched as the architect of the Edge condominium towers on the Williamsburg waterfront, only to be swapped out for Stephen P. Jacobs and Associates when it came time to build. Richard Meier and SOM came up with the scheme for Sheldon Solow's Con Edison development just south of the United Nations. Parcels have since been sold off, with more on the block, and it is uncertain who might wind up conceiving of the final projects.

Most famously, Bruce Ratner dumped Frank Gehry from his Atlantic Yards project after the recession led to a reevalution of the work of the Pritzker Prize winner, whose buildings are notoriously expensive and difficult to execute. Mr. Ratner tapped Ellerbe Beckett, a no-nonsense designer of sports venues throughout the nation, to replace Mr. Gehry on the Barclays Center. Even though she had no oversight of the project at any point, Ms. Burden was said to be so bothered by the switch that she successfully lobbied to have local wunderkinds SHoP brought on to help redesign the facilities.

The most apt comparison to the situation at Riverside Center might be what happened at the World Trade Center. Little remains of Daniel Libeksind's masterplan but the outlines of the project, a crescent of towers stepping down in size along Greenwich Street. Granted, some of the world's most famous architects have stepped in to replace Mr. Libeskind. At the same time, the strict design controls at Riverside Center will make any successors who are not Mr. de Portzamparc stick much closer to the French architect's vision.

Ms. Sheffer points to an incident closer to home, Fordham University. The school was working on plans to redevelop its Manhattan campus near Lincoln Center, which included selling off some parcels for development. While there was a general consensus that a residential tower proposed by Douglaston Development was too big, people at least seemed to like the design created by celebrated architect Cesar Pelli, he of World Financial Center and Bloomberg tower fame.

"The deal seemed to be the deal," Ms. Sheffer said of Fordham's plan, "but then they made a deal with Glenwood, and suddenly it looks like everything else Glenwood has done and that's not every interesting."

She hopes this will not be the case at Riverside Center. "I think the feeling was, the de Portzamparc buildings, it was a vision, a particular kind of towers that related to each other and to the open space and the neighborhood, with the view down to the river," Ms. Sheffer said. "In the renderings, it certainly didn't look like the rest of Riverside South, and that was a good thing. But now, we can't be so sure. Maybe it's a lot of hype, maybe not."

But would this be New York City real estate if that were not the case?

Update: This story has been changed to include details about other projects that have gone through similar design switches as well as other projects SLCE has worked on. Also, a previous version stated that Dermot was developing two towers on the site, rather than just one. The Observer regrets the error.

General Motors sold out of G.M.A.C., its financing arm in, in 2005, borrowed $17.2 billion from the Treasury at the height of the financial crisis, changed its name to Ally Financial (and yes, sponsored Adam Davidson's Marketplace). Now Ally is spinning off Residential Capital, its mortgage lender, through bankruptcy proceedings, and Steven M. Davidoff sees Ally's debt to the government as hindering risk-taking.

The Wall Street Journal sees the Obama administration's involvement in Carlyle Group's deal to buy a Pennsylvania refinery at odds with the Obama campaign's attacks on the private equity industry.

Regions Financial, the Alabama-based lender that repaid $3.5 billion in bailout funds to the U.S. Treasury in April, is the subject of a grand jury investigation, The Journal reports. The rub: the lender's relationship with a recruiting firm that wined and dined Regions' execs and borrowed money from the bank.

The Journal also sees some buy-out firms struggling to raise funds, Wilbur Ross among them.

A Vietnamese banker was arrested, and markets swooned.

The first recipient of the Security and Exchange Commission's whistle-blower program received $50,000, or one-third of the funds recovered due to the individual's case. The payee stands to gain more as the SEC continues to recover funds.

The Justice Department and Federal Reserve are probing Royal Bank of Scotland for possibly violating sanctions against Iran, sources told Bloomberg. Long-arm-of-the-Lawsky and the New York State Department of Financial Services are staying out of this one, apparently.

With a lull in the Libor action, Iran sanctions becoming old hat, Reuters digs into the other, other British banking scandal: interest rate swaps. Lenders such as RBS and HSBC have provisioned funds against lawsuits charging banks mis-sold swaps to small businesses in the run-up to the financial crisis.

Change of tide? François Hollande defeated Nicolas Sarkozy, as expected, in a runoff election, installing as French president a socialist party leader who has promised to revisit austerity plans negotiated between Mr. Sarkozy and German Chancellor Angela Merkel. In Greece, voters shifted support away from political mainstays to extreme parties, placing the future of austerity in that country in question. The "bitter reality" of the European economic situation may preclude Mr. Hollande from straying too far from his predecessor's path.

In Greece, on the other hand, the election results increase chances that the country will exit the euro to 50-75 percent, according to two Citigroup economists, though they say that a broad break-up of the monetary union is unlikely.

Zero Hedge has your guide to Europe for Dummies.

Preferred customers: Some MF Global clients have recovered holdings from the failed broker, while others have yet to see a dollar, the Wall Street Journal reports. The difference: where the clients invested their money. Funds invested in the U.S. have been at repaid 72 percent, but regulatory quirks leave those with money invested overseas waiting to recover funds.

Seeking allies: Reuters digs into the state of affairs at Ally Financial, "one of the least scrutinized bailouts of the financial crisis," and hears that mortgage-lending unit ResCap may be placed in bankruptcy within the next week. Ally, meanwhile, has been the victim of competing interests internally and lax government oversight. With indications that General Motors and Chrysler are less likely to auto loans to Ally, the Treasury's 74 percent stake in the company could lose value.

Buffett bailouts: Warren Buffett said his investments in Goldman Sachs and General Electric were of little importance to Berkshire Hathaway when compared to longer-term stock holdings and company acquisitions. Buffett invested a combined $8 billion in the two companies in the depths of the financial crisis, but profits from those deals are just "peanuts," according to Bloomberg. “They’re not remotely as important as buying Coca-Cola stock,” Buffett said at Berkshire's annual meeting on Saturday. “The values in Berkshire that have been accumulated by some special security transaction are really just peanuts compared to buying businesses like Geico, or Iscar or BNSF.”

Public equity: The Washington Post gains access to the Carlyle Group dealmakers behind the 2005 takeover of a beleaguered auto parts company, and finds unsentimental capitalists wielding "a blunt instrument to reorder unproductive businesses and create vast wealth." Which is a mighty good thing, when it works.

Hiring rebound: New job openings in the City of London rose 9 percent in April from the month prior, as liquidity from the European Central Bank drove staffing in fixed income units, and lenders continued to take on compliance experts in adapting to new regulations. Openings are still down 27 percent from the year before, according to the Financial Times.

Bang the drum slowly: Management at embattled Dewey & LeBouef acknowledged in a Friday afternoon memo that the firm may close and employees may lose their jobs, Dealbook reports. They might have guessed something was up when the firm closed the mailroom and copy center.

[KENZO TRIBOUILLARD/AFP/GettyImages]

Bad gas: From 2004 to 2008, Chesapeake Energy CEO Aubrey McClendon ran a private hedge fund that traded the same commodities that Chesapeake produced, according to Reuters. The $200 million fund listed Chesapeake's Oklahoma City HQ as its mailing address, and employed an accountant who was also on staff at the natural gas powerhouse. Marketing the fund, we expect, was a breeze.

McClendon addressed media for the first time since he was stripped of his chairmanship, but wouldn't discuss reported conflicts of interest: "Your mother told you not to believe everything you read or hear for good reason,” he said.

Phoenix falls: Merger discussions between New York law firm Dewey & LeBoeuf and SNR Denton fell through yesterday, raising the chances that Dewey will collapse under the weight of its debt burden and partner exodus. Chances for a deal, which SNR Denton brass nicknamed "A Phoenix Rises from the Ashes," diminished after Dewey announced that the Manhattan's district attorney had opened a criminal investigation into the firm, according to the Journal.

Priced to sell: Carlyle Group closed its IPO at $22 a share, valuing the company at $6.7 billion, after the private equity firm lowered its asking price from the $23 to $25 range it had sought. The lower price reflects skittishness after previous private equity IPOs lost value, but founders Bill Conway, Daniel D'Aniello and David Rubenstein will make out fine: Each retains about 15 percent ownership in the company.

The D.C.-based firm will trade on Nasdaq under the CG ticker.

Class warfare: At a meeting with Obama campaign manager Jim Messina last fall, a wealthy donor asked whether there was anything the president could do to stop attacks on the rich, Nicholas Confessore reports in the forthcoming Times Sunday Magazine:

The president had won plaudits for his speech on race during the last campaign, the guest noted. It was a soaring address that acknowledged white resentment and urged national unity. What if Obama gave a similarly healing speech about class and inequality? What if he urged an end to attacks on the rich?

It's a brilliant anecdote, and a not not alarming bit of self-pity and conflated identification. But there's something about the nakedness of the appeal that disarms: Isn't it our right, the donor seemed to be asking, to be rich?

(H/T Greg Sargent.)

Off again, on again: So much for the hope (in some quarters) that the Volcker rule would be scrapped. Jamie Dimon led a cadre of bank chieftains into a meeting with Fed governor Daniel Tarullo yesterday, presumably to criticize the rule. Nonetheless, the Dealbook reports that regulators are hammering out the final language, and think they're back on track to meet the July deadline set forth in Dodd-Frank.

North rises: Canadian banks have gone on a buying spree as U.S. and European banks shed assets in the wake of impending doom, with the six largest banks from the Great White North dropping a cool $38 billion on acquisitions since 2008. The upshot: Canada is home to four of the world's top 10 strongest banks, Bloomberg Markets magazine reports. (JPMorgan is the strongest U.S. bank, according to Markets, clocking in at 13th worldwide.)

P&Ls: For those who have already gotten over the disturbing story linking the influx of casino cash to dead horses at New York State racetracks, the Journal figured out which Kentucky Derby entrants have been the best investments.

Somebody Screamed: Sotheby's sold Edvard Munch’s The Scream for a record $119.9 million last night, smashing the mark for art-at-auction, set at Christie's in 2010. Gallerist has the action.

If you're into that kind of thing: The blogger who brought you the Anonymous Finance Guy Who Pays for Sex is back, this time with the Anonymous Wall Street Escort Who Wants to Tell Clients They’re Bad in Bed.

[Photo by Hunter Martin/Getty Images]

A 49 percent interest in 650 Madison Avenue, a trophy office tower just steps from the GM Building, is about to be put on the market, multiple industry sources told The Observer. The 500,000-square-foot building is valued at around $950 million, a source said,

Ralph Lauren currently occupies 280,000 square feet, or more than half of the office space in the tower. But the building also has some of the city's most coveted retail space, at the corner of Madison Avenue and 60th Street, just around the corner from Apple's 24-hour glass chapel of high-tech consumerism.

Ashkenazy Acquisitions and the Carlyle Group bought 650 Madison for $680 million in 2008, in one of the biggest sales of that admittedly somber year. In June 2010, China Investment Corporation (CIC) helped refinance the tower, according to Bloomberg. CIC also joined with AREA Real Estate Finance Corp. to buy an unspecified equity stake in the tower. Carlyle owns the rest, and will be the partner that remains after the 49 percent sale, a source said.

The building has about $500 million in debt.

The stake in the property will be one of the more expensive offerings to come on the market since the recent investment sales slump, but the sale of luxury retail property in particular is coming back briskly. A partnership of the Carlyle Group, Crown Acquisitions and the Kushner Companies recently sold the retail condo at 666 Fifth Avenue for $324 million, in one of the largest retail transactions in history. (Jared Kushner, a principal at Kushner Companies, is the publisher of The Commercial Observer.) Just down the street from 650 Madison, Joseph Safra reportedly paid $285 million for Barneys' home at 660 Madison Avenue, a price per square foot of $1,100, according to Bloomberg.

The marketing and interest in the property is expected to heat up within the next six to eight weeks, but for now we'll have to content ourselves with the buzz of anticipation.

Eastdil Secured is handling the marketing of the property.

lkusisto@observer.com

"Sidelined by a painful gall bladder ailment in Germany several years ago, Daniel Akerson decided to take things into his own hands," the Forbes piece begins. "He pulled the tubes out of his arm, checked himself out of the hospital and then got on a plane for the States. 'The German doctors were not moving fast enough,' the U.S. Naval Academy graduate complains."

The article says, metaphorically, that pulling out tubes is something Mr. Akerson does often. "I want turmoil; I want excitement," the executive declares in the profile, written after he had left MCI to replace Donald Rumsfeld at the helm of General Instrument, which supplied those petite cable boxes that sat atop TVs once upon a time.

According to the article, he envisioned "a box in every home," which sounds like something Alfred Sloan ("A car for every purse and purpose!"), the iconic General Motors head, might have said. Maybe Mr. Akerson will fit in well.

The Carlyle Group—the mammoth private-equity group that manages $82.7 billion in 60 funds worldwide and recently, with Ashkenazy Acquisition Corp., bought 650 Madison Avenue for $680 million—is buying in partnership with Stanley Chera’s Crown Acquisitions. The 49 percent stake, as reported by Bloomberg News, in the approximately 90,000-square-foot retail portion, which includes a Brooks Brothers and the NBA Store, is valued in the deal at $525 million.

Kushner Companies added value to the deal by buying out the remainder of the Brooks Brothers’ below-market lease, which was originally scheduled to expire in 2014. Now, Brooks Brothers will vacate by Jan. 31. Abercrombie Kids recently signed a lease to occupy half of the Brooks Brothers space, starting Feb. 1, at an estimated $2,500 a square foot.

Jeffrey Roseman, executive vice president of Newmark Knight Frank Retail, said that that is the highest retail rent in the city “by a country mile.”

“The highest deal before that was Armani; that was maybe $1,600 to $1,700 a foot at 717 Fifth Avenue,” Mr. Roseman said. “That stretch of Fifth Avenue is just incredible. … Probably the highest-grossing stores per square foot in New York are Abercrombie & Fitch at 56th and Fifth and the Apple Store at 58th and Fifth. Those stores are doing anywhere between $6,000 and $10,000 a square foot. In New York, a store is considered successful if it earns $800 a square foot.”

“This sets a new rent level, but we’ve been close to that before,” added Faith Hope Consolo, chairwoman of Prudential Douglas Elliman’s Retail Leasing and Sales Division. “That’s a new high. But you know what, it’s a corner, it’s got huge frontage, it’s a southbound corner on a southbound street. It doesn’t get any better.”

The retail space has more than 200 feet of frontage on the gilded Fifth Avenue.

The deal, which is being financed by Barclays and SL Green and was brokered by Carlton Group’s chairman, Howard Michaels, comes at a good time. This transaction will allow Kushner Companies to pay off $335 million in short-term debt.

Kushner will retain a 51 percent interest in the retail condo as well as continue to own in full the 1.45-million-square-foot office tower where it’s located. (Jared Kushner, a principal at Kushner Companies, is The Observer’s publisher.)

A spokesman for Kushner Companies had no comment.

drubinstein@observer.com

Carlyle Group -– the mammoth private equity group that manages $82.7 billion in 60 funds worldwide and recently, with Ashkenazy Acquisition Corp., bought 650 Madison Avenue for $680 million -- is purchasing this deal in partnership with Stanley Chera's Crown Acquisitions. The 49 percent stake, as reported by Bloomberg News, in the approximately 90,000-square-foot retail portion, which includes a Brooks Brothers and the NBA Store, is valued in the deal at $525 million.

Kushner Companies added value to the deal by buying out the remainder of the Brooks Brothers’ below-market lease, which was originally scheduled to expire in 2014. Now, Brooks Brothers will vacate by Jan. 31. Abercrombie Kids recently signed a lease to occupy half of the Brooks Brothers space starting Feb. 1 at an estimated $2,500 a square foot

Jeffrey Roseman, executive vice president of Newmark Knight Frank Retail, said that's the highest retail rent in the city "by a country mile."

"The highest deal before that was Armani; that was maybe $1,600 ot $1,700 a foot at 717 Fifth Avenue," Mr. Roseman said. "That stretch of Fifth Avenue is just incredible. ... Probably the highest-grossing stores per square foot in New York are Abercrombie & Fitch at 56th and Fifth and the Apple Store at 58th and Fifth. Those stores are doing anywhere between $6,000 and $10,000 a square foot. In New York, a store is considered successful if it earns $800 a square foot."

“This sets a new rent level, but we’ve been close to that before," added Faith Hope Consolo, chairman of Prudential Douglas Elliman's Retail Leasing and Sales Division. “That’s a new high. But you know what, it’s a corner, it’s got huge frontage, it’s a southbound corner on a southbound street. It doesn’t get any better.”

The retail space has more than 200 feet of frontage on the gilded Fifth Avenue.

The deal, which is being financed by Barclays and SL Green and was brokered by Carlton Group chairman Howard Michaels, comes at a good time. This transaction will allow the Kushner Companies to pay off $335 million in short term debt obligations.

Kushner will retain a 51 percent interest in the retail condo as well as continue to own fully the 1.45 million-square-foot office tower where it's located. (Jared Kushner, a principal at Kushner Companies, is The Observer's publisher.)

A spokesman for Kushner Companies had no comment.

Which makes this news all the stranger: The Carlyle Group has purchased two tiny buildings in the meatpacking district, according to city records.

It purchased, along with Sitt Asset Management, a 9,900-square-foot building at 414 West 14th Street and the 16,100-square-foot 416-418 West 14th Street for $70 million from the Icon Group.

The Carlyle Group declined to comment, but it’ll be curious to see what it fills the retail space with: a nightclub, dare we say? The club that used to be there, Rare, has closed.

In the suit, Corcoran claimed that the sale of the high rises to Extell and the Carlyle Group last year triggered the payment of the outstanding portion of the $4 million commission that Trump had promised. But Judge Richard Lowe III wrote tha, according to their contract, the commission was only due when Trump sold his share in the Hudson Waterfront partnership, and not when the partnership sold off the land.

In the meantime, Trump will pay 2.5 percent of the distributions received from his investment, and, unless an appeal changes anything, Corcoran will pay Trump his legal fees.

-Matthew Schuerman