The two towers, back from the dead. (Pay a Visit)

The Observer is not sure which is worse: a Tommy Hilfiger-themed hotel or just another blasé Marriott. The fashion designer had planned to tranform the Madison Square icon into a red-white-and-blue boutique hotel before he backed out. A plan to turn the landmark into condos already failed, but the owners have found a new buyer who still wants a hotel overlooking Shake Shack.

This will not be any old Marriott, though, The Journal reports. The MetLife clocktower is becoming an Editions Hotel, a brand led by none other than the very public Ian Schrager.

The lodging giant signed a contract earlier this month to pay $165 million to Africa Israel USA for the property, according to people familiar with the matter.

Marriott is likely targeting the site for its stylish Edition Hotel line, hoping to build fresh momentum for Edition after the brand stumbled coming out of the gate, some people in the hotel industry say.

The Bethesda, Md., company announced Edition in 2007 with hotelier Ian Schrager as a partner. It predicted then it would open 100 Edition hotels over 10 years. So far, there is one in Istanbul and one in Honolulu.

Meanwhile, another article in The Journal reveals that Steve Ross and HFZ Capital are closer to taking over the teetering One Madison. The two developers had been sparring over control of the property, but they have since teamed up and hope to win out at an auction to take place in December.

mchaban [at] observer.com | @MC_NYC

The iconic Clocktower Building is changing hands.

Africa Israel USA, the controversial owner and operator of commercial properties across the United States, has entered into a contract to sell 5 Madison Avenue to an undisclosed investor for $165 million.

The 267,000-square-foot structure, also known as the Clocktower Building, has been vacant since 2005. A tentative deal to sell the property to Tommy Hilfiger earlier this year officially fell through last month after he failed to secure adequate financing, according to published reports.

The undisclosed buyer has made a $5 million deposit, $2 million of which is non-refundable, according to a statement by AFI USA’s general counsel Laurie Golub in a press release issued today. The price during discussions with Hilfiger was reported to be $170 million.

“We are delighted to have reached an agreement with a very credit-worthy buyer to secure the future of this remarkable building and support the burgeoning vitality of the Madison Square Park neighborhood,” Tamir Kazaz, chief executive of AFI USA, said in a statement.

AFI USA purchased the Clocktower Building in 2007 with its partners RFR Holdings and hotelier Ian Schrager for $200 million from SL Green. AFI USA has $1.5 billion in debt from U.S. real estate acquisitions made at the height of the market, according to Bloomberg.

Doug Heitner and Ashley Lostritto of Kasowitz Benson Torres & Friedman represented AFI USA.