Rem Koolhaas's 23 East 22nd Street: still not happening.

As some of New York's avid construction watchers have noticed, something is afoot at One Madison Park. Specifically, on the 22nd Street side of the site, where Rem Koolhaas and his firm, OMA, were once tapped to build a staircase-like 22-story tower, which was to rise from the townhouse-sized site and cantilever over the building to the east.

That plan is no more, done in by the recession and the original developers' spectacular bankruptcy. Something is, however, now rising from the site, and the neighbors are wondering, what's up?

Curbed published a tip in January suggesting that the building now rising will be six stories, which The Observer has confirmed with an executive from the Related Companies this afternoon. We also learned that the lobby, as the relatively squat structure is being called, will feature two full-floor duplex units, starting on the third floor and rising to the sixth. The architect, however, has not yet been named.

Meanwhile, back at the main tower on 23rd Street, it's been more of the usual weirdness from last cycle's most ostentatious blow-up—a number of in-contract units were taken down from Streeteasy last month, ranging from a $2.26 million one-bedroom on the 19th floor to a $13 million, 3,310-square foot spread on the 57th; two would-be buyers also just now got their deposits back, after nearly five years in escrow.

Still, we're guessing all of this will be forgotten once sales, to be handled in-house by Related, start back up again this spring—just in time to ride the latest condo boom, with two new units to boot.

Safe?

Mid-tier developer Ziel Feldman has pledged $200 million to rescue the city's most troubled residential tower from bankruptcy and take full control of One Madison Park.

According to MarketWatch, Mr. Feldman will team up with the CIM Group (a rumor we've heard flying around for several weeks).  The California-based fund is also developing the Drake Hotel site with Harry Macklowe and is working with the Sapir Organization on William Beaver House and the Trump Soho.

The Observer previously reported that Mr. Feldman had bid $165 million to take over the tower. Similarly, according to this plan, the iStar debt will be split into two components: a $162 million secured note and a $69 million unsecured claim that could possibly be waived.

Months have passed since Mr. Feldman emerged as the leading bidder for the tower, with multiple delays in filing the rescue plan. Nonetheless, Mr. Feldman is far from home safe. Steve Ross' Related Company and Amalgamated Bank, a junior lender, are also vying to take control.

Even if Mr. Feldman and his powerhouse partner, CIM, succeed in taking over the unfinished tower, it will require millions of dollars of renovations, including finishing the lobby, pool and spa. Experts say they will need to fetch on average $2,500 a square foot for the condos to turn a profit.

View from the frontier.

A couple of weeks ago, The Observer peered at a single light burning at failed condo project One Madison Park and speculated that it must be quite lonely at the top. Today The Journal reports that it's a veritable frontier up there.

The dozen buyers (nine of whom The Observer has been told have moved in) are roughin' it, with no pool, no spa and (heavens!) an unfinished marble lobby. Add to that the indignity of looking out at the Empire State Building from a maintenance-free $1.5 million condo with a one-to-one staff-to-resident ratio and life must indeed be hard.

Ziel Feldman is set to present a rescue plan to bankruptcy court any day n0w. According to today's story, units could then hit the market later this year. While the new buyers will have to pay a great deal more than current residents did if Mr. Feldman and his partners are to recoup their investment, at least they'll get some amenities thrown in.

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."

 lkusisto@observer.com

This was in addition to the sweetheart $5 million deal Mr. Eichner got for his apartment in exchange for an all-cash purchase that helped prop the 69-unit development up. The lead lender, iStar Financial, objected to both deals, and it is now gearing up for a court fight that begins tomorrow, according to The Journal.

In court papers, iStar is arguing now that Ira Shapiro, one of the tower's two original developers, has no right to negotiate with Mr. Eichner on a bankruptcy, as the building was put into receivership earlier this year. In orchestrating the bankruptcy and Mr. Eichner's involvement, Mr. Shapiro may even have committed fraud, iStar's attorneys contend, The Journal reports, and any deal would cost iStar half its equity while giving Mr. Eichner "an enormous return."

If the developers succeed in besting iStar, it would be yet another mercurial recovery for Mr. Eichner, who has seen real estate empires collapse both in the '90s and last decade. As is so often the case in New York City real estate, there's always second or third or fifth chances for a savvy operator.

mchaban@observer.com

One Madison Park has struggled along for more than a year now, stuck with lawsuits, foreclosures and bankruptcies. On Friday, one of its condo owners, developer Bruce Eichner, offered to infuse the building with $40 million in exchange for his Continuum Company taking a controlling stake in the project. The building's original developers, Ira Shapiro and Marc Jacobs of New Jersey, have agreed to the deal, as has the general contractor. The building's lender, iStar Financial, which has been out to foreclose on the building for months, is considerably less enthusiastic about the deal.

IStar has already criticized Mr. Eichner and a handful of other tenants for buying grossly discounted units--in his case one for $5 million, more than half-off--and while no clear indication was given to The Journal, the lender seems prepared to fight this deal, as well. Mr. Eichner and his team are willing to pay iStar $124 million, well below the $233.5 million the lender is owed, but not far from the roughly $135 million iStar has appraised the building at. That seems like a fair price to be rid of this ongoing headache, but if it is true that high-end real estate is really back, iStar may be better off holding out for the entire building after all.

mchaban [at] observer.com | @mc_nyo

In short, and in contrast to many less bowled-over bystanders, Mr. Ouroussofff loves the new building. Even he is surprised.

The achievement seems particularly improbable, given the firm that designed it. During its more than 20 years of existence, CetraRuddy had never before produced a building of any architectural significance. If it is known at all in the wider architectural world, it is for the infomercial, repeated endlessly on taxicab video screens, in which one of the firm's founding partners, John Cetra, hawks apartments in a pair of generic glass-and-steel towers in Jersey City.

Read the whole review here.

drubinstein@observer.com

On May 6, Jonathan Newman, the receiver overseeing the development at One Madison Park, requested judicial approval to hire Tamarkin Anderson as a development consultant.

Tamarkin Anderson would, according to a May 3 letter sent to the receiver, oversee completion of the project's Phase One, which includes "Construction, [temporary certificate of occupancy], and Final Certificate of Occupancy for residential floors in the 51-story existing tower;" Phase Two, including the development of "two amenity floors;" and Phase Three, which would involve "Determining scope, all phases of Design, Bidding, and Construction of Improvements on the vacant lot at 23 East 22nd Street." That's the lot that was originally supposed to hold a second tower, to be designed by Rem Koolhaas.

Neither Mr. Tamarkin nor Jonathan Newman, the receiver, immediately responded to a request for comment.

drubinstein@observer.com

A judge on Thursday ordered the appointment of a receiver and the resumption of sales at the 23rd Street condominium tower, a 60-story monument to the reckless hubris of the run-up to the Great Recession.

The building is still incomplete, is the subject of more than a dozen lawsuits and has caused a rift between the two principals and onetime friends who, as Slazer Enterprises, developed the tower. In February, lender iStar Financial sued to foreclose on the property, which forced a halt to all sales in the building.

The Observer profiled the development, and the resulting imbroglio, in March.

Tamir Shemesh, the Prudential Douglas Elliman broker in charge of sales at the condo, said he was thrilled with the news.

"All parties are extremely happy with the judge's ruling, because obviously nobody wants to see the project fail," he said.  "We have a lot of buyers that are waiting for resolution so they can move forward because they love the building so much."

drubinstein@observer.com