Volume 19 • Issue 9 | July 21-27, 2006

Goldman to buy Embassy Hotel

By Ronda Kaysen

Goldman Sachs is in negotiations with Embassy Suites to buy the Battery Park City hotel, Downtown Express has learned.

The investment bank recently began construction on a new $2.4 billion headquarters directly opposite Embassy Suites. A block-long pedestrian walkway is all that separates the two parcels, which are bounded by West St., Murray St., North End Ave. and Vesey St. The 453-room hotel also contains a United Artists Regal movie theater, an Applebees restaurant, a New York Sports Club and other retail shops.

“The parties expect to have an agreement signed this Friday and then hope to close approximately 30 days thereafter,” Martha Redo, a lawyer for Goldman, wrote in an e-mail to Community Board 1 requesting support for a liquor license for the hotel bar.

According to Redo’s e-mail, the hotel will continue to operate in much the same way under the new ownership. “While obviously there may be some changes internally, the general operation will not change in any significant manner,” she wrote.
It was unclear if Goldman was looking to buy just the hotel or the entire building, in which case the fate of the 11-screen movie theater would be unknown. Ticket sales at the cinema have always been sluggish, particularly since 9/11, when the theater lost tens of thousands of potential customers working across the street.

There is much speculation about what the investment bank plans to do with an all-suite hotel. A Downtown real estate source who had heard generally about Goldman’s plans said of the Embassy building, “Let’s start with the fact that it’s really ugly.” He said the firm would likely either demolish the building or change its façade and could be interested in the hotel as a place for visiting executives to stay.

He said the security-conscious firm is undoubtedly interested in controlling the site across from its headquarters. “I’m sure proximity has a lot to do with it,” he said.

Others were less certain that Goldman would seriously alter the face of the neighborhood. “I don’t think they’d be applying for a liquor license if that were the case,” said C.B. 1 district manager Paul Goldstein when asked if he thought Goldman might demolish the building. Goldstein thought it more likely that they would want control over the hotel, which is owned by Hilton. “Maybe they’re interested in a hotel space since they’re going to have their headquarters nearby,” he said.

Goldman has played a key role in the rebuilding of Lower Manhattan. The company yanked its plans to build the headquarters there in early 2005 because of security concerns about the new Freedom Tower and a proposed West St. tunnel that would have emptied out in front of their building. The tunnel was then scrapped and the Freedom Tower redesigned. Last summer, Governor George Pataki and Mayor Michael Bloomberg coaxed the investment bank back to Battery Park City with $150 million in tax breaks and $1.6 billion in tax-free Liberty Bonds. That same year, the investment bank earned $4.5 billion in profits.

Some residents have criticized the 740-foot tower for being too cut off from the neighborhood — it offers no access to the public and has limited retail space on the ground level. With Goldman owning the building opposite to it, the company could theoretically cut off what little public access remains.

Goldstein, however, is confident the agreements eeked out with the community will be honored. “They’ve made commitments on that walkway, I assume that they would abide by the commitments they made,” he said.

According to another Downtown source, Brookfield Properties, which owns the World Financial Center, “had some role in this,” but Melissa Coley, a Brookfield spokesperson, said she knew nothing of the deal.

Goldman spokesperson Andrea Raphael declined to comment, saying that the company does not comment on any pending negotiations.

Redo was more direct. “I don’t know if this is even a done deal yet. I don’t think anything is signed yet,” she told Downtown Express.

With reporting by Josh Rogers


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