Volume 19 • Issue 11 | July 28- - August 3, 2006

Enjoy the show —movies will stay, Goldman says

By Ronda Kaysen

Battery Park City will not lose its only movie theater if Goldman Sachs buys the building that houses them both, according to the terms of the current owner’s lease.

The investment bank is in negotiations with Forest City Ratner Companies to buy the 617,000 sq. ft. Embassy Suites Hotel complex at 102 North End Ave.— across a pedestrian walkway from Goldman’s $2.4 billion headquarters, which is currently under construction. The deal is expected to close within 30 days.

Forest City Ratner, developer Bruce Ratner’s company, signed a land lease with the Battery Park City Authority in 1998 to develop the parcel. According to the terms of the lease, the property must contain a short-term stay hotel and a theater. Up to 75,000 sq. ft. of additional retail space is permitted but not required. Office use is prohibited.

Both properties sit on a parcel of land bounded by West St., Murray St., North End Ave. and Vesey St.

The movie theater, United Artists Regal, has struggled in recent years, closing five of its 16 screens in 2004 — a decision that required authority approval. Nevertheless, it is the only multiplex south of Houston St., and word that a new owner might take control of the building sent a ripple of worry through the community.

“It’s really important to the community that we have a movie theater there; it’s the only one we have,” said Community Board 1 chairperson Julie Menin.

The theater is also home to the Tribeca Film Festival. The festival used only two screens last spring, but many of its press events were held there, and it is the primary Downtown theater the festival uses, a festival spokesperson said. Jane Rosenthal, the festival co-founder, was on vacation and could not be reached for comment.

A Goldman official attempted to ease community concerns at a recent C.B. 1 meeting, insisting that the investment bank did not intend to shut down the hotel or the theater.

“The intention is not to take this over and turn this into office space. We want this to be there to service our employees, who will be members of the community during business hours,” said Robert Springer, a Goldman real estate investment associate. “We’ll make every effort to keep a movie theater here.”

If Goldman decided to close the theater or hotel, it would have to renegotiate the ground lease with the authority, which has the power to change the terms of the lease.
Ratner has been trying to unload the Embassy building for a long time, according to Zane Tankel, chairperson and C.E.O. of

Apple Metro Inc., which owns the Applebee’s and Chevys restaurants in the complex. “They’ve had real difficulties with that property,” Tankel told Downtown Express. “The two [hotel] restaurants have both gone belly up… the hotel has suffered poorly.”

The West Side Highway cuts off the building from the rest of Manhattan — “It might as well be a West Side wall,” said Tankel — and retailers in the neighborhood lost tremendous business after 9/11 from the Trade Towers.

Ratner, who is currently developing the Atlantic Yards in Brooklyn and a 75-story Beekman St. tower in Lower Manhattan, declined to comment.

Goldman was initially approached to purchase just the hotel, but the deal eventually grew to include the entire building, Springer said. “It seemed appealing to us to be able to control both sides and make sure that we provided the right services for us and for Goldman Sachs employees,” he said. Downtownexpress.com first reported on July 19 that Goldman was negotiating to buy the Embassy Suites.

Tankel suspects that Goldman will breathe new life into a languishing retail complex. Goldman’s new headquarters will bring 9,000 new workers to the neighborhood and the company, which earned $4.5 billion in profits last year, will likely have numerous business guests in need of an all-suite hotel like Embassy. “It could immediately become a profit center, rather than a loss center,” said Tankel, whose restaurants have 20-year leases.

Goldman has long expressed security concerns for its headquarters. In early 2005, its plans to build the Battery Park City headquarters collapsed because of a proposed West Side tunnel that would have emptied out at its doorstep and because of security concerns about the planned Freedom Tower. After Goldman bowed out of the development, the tunnel was scrapped and the Freedom Tower redesigned. Public officials lured the investment bank back last summer with $1.6 billion in Liberty Bonds and $150 million in tax breaks.

The headquarters will have no public atrium and Goldman will control the pedestrian walkway between its headquarters and the Embassy building. The company plans to transform the outdoor corridor into a glass-enclosed walkway between the two towers.

It is unclear what security measures the company might impose on visitors seeking to access the Embassy restaurants and shops. “This is a post-9/11 world,” Springer said. “Are we going to lock down the Embassy Suites? Absolutely not. This is an investment for Goldman Sachs.”

The Embassy building has a glass façade facing Goldman’s new headquarters, and C.B. 1 members wondered what might come of the façade that looks out onto the neighborhood ballfields and the Goldman tower site. “I don’t know of any plan that says, ‘We’re specifically buying that building to get rid of that glass as a security measure,’” said Springer. “There are no plans for walling off part of the building.”

The Battery Park City Authority must approve any changes to the façade. Agency officials declined to comment.

Some community board members voiced frustration with what they described as a cagey response from Goldman. “We just want to be able to communicate with them to the point where we can rest assured that our community amenities will remain intact,” said C.B. 1 member and Battery Park City resident Tom Goodkind. “It’s a little too cloak and dagger for a community with families. They’ve got to do a bit of work when it comes to community affairs.”

Springer answered C.B. 1 members’ questions at the meeting but he and firm spokespersons declined to comment to Downtown Express for this story.

Springer appeared at the community board to apply for a liquor license for the hotel bar, but seemed poorly versed in the details of the license itself. The bar operator was not present at the meeting and Springer was unclear about specifics of the agreement between his company and the operator. Nevertheless, the board recommended approving the license, which must be approved by the State Liquor Authority.


Ronda@DowntownExpress.com


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