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Old Posted Jan 30, 2009, 3:04 AM
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Put on hold before it even began...
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Times Square-area tower put on hold
Boston Properties and The Related Cos. pull back from Eighth Avenue project, take charges.


January 29, 2009

Boston Properties Inc. and The Related Cos. have put the breaks on ambitious plans to build an office tower in Times Square area.

The news was contained in the Boston Properties’ latest earnings report, which was released Thursday. That report showed that in the final quarter of the year the company recorded nearly $190 million in write downs and expenses related to three Manhattan office towers that it acquired from troubled real estate developer Harry Macklowe last year.

According to the earnings report, the two developers suspended work on the Eighth Avenue and 46th Street project in the fourth quarter. As a result of the suspension, Boston Properties reported a charge of about $23 million, which stems from forfeited contract deposits, planning and pre-development and other costs.

Boston Properties did not immediately return calls for comment, while Related declined to comment.

As recently as October, the developers had filed requests with the New York City Department of Planning to transfer 120,000 square feet of development rights from three nearby theaters on Eighth Avenue between 45th and 46th streets that are owned by the Shubert Organization. The rights were to be used to add extra stories to the planned tower. In addition, the developers had requested a special permit to build a 406-space public parking lot on the site. The applications for the transfer were officially withdrawn on Jan. 12, according to the Department of City Planning Web site.

Separately, Boston Properties reported Wednesday $188 million of impairment charges during the fourth quarter of 2008 due to the decline in fair value of some of its office properties in Manhattan. The company’s total charges for the quarter also included the expenses associated with the scrapped Times Square project.

Last year, it bought the three office towers—540 Madison Ave., Two Grand Central Tower and 125 West 55th St.—from Harry Macklowe for $1.1 billion at the same time it acquired the General Motors Building for $2.8 billion from Mr. Macklowe’s bank.
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