Extell Development has lined up financing that could allow it to move forward on a supertall mixed-use hotel in the Theater District, equipped with an observation tower and high-elevation, 260-foot drop ride.
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Gary Barnett’s firm has entered into a memorandum of intent with an unnamed bank that would provide as much as $1.3B of financing, consisting of a senior construction loan and mezzanine debt, for the development of what has been dubbed “The Torch,” according to a Feb. 25 filing on the Tel Aviv Stock Exchange, obtained by Bisnow and translated via Google.
Additionally, the filing says that the company has signed a letter of intent with an unnamed hotel chain that would also help firm up the financing. The brand has agreed to invest in the project’s construction and provide a guarantee that might allow Extell to land an additional $150M mezzanine loan.
An Extell spokesperson didn't respond to Bisnow’s request for comment.
If Extell is able to secure the capital, it would fuel the construction of the 875K SF, 825-room hotel. Some work has already begun on the 1,067-foot-tall building that would tower over Times Square.
The company estimates that construction would take approximately 4.5 years and that the project would generate an annual net operating income of between $250M and $270M, according to the filing.
In typical Extell fashion, the supertall development would be built on an assemblage that Barnett pieced together through the years with various land and air rights purchases.
Renderings revealed last year by New York YIMBY have shown a tall, spiral-like column, surrounded by glass-enclosed staircases, as well as a 300-foot-tall transparent tube for the amusement ride.
In addition to the hotel and ride, there are plans for an observation deck, VIP lounge and pool deck, and restaurant and retail space, according to previously reported filings.
The Department of Buildings has approved the thrill ride, but it has been a subject of debate between the Theater District community and Barnett, who has argued that such attractions are the future of New York City’s hospitality industry.
His push to get started on 740 Eighth Ave. is far from the only major project he has cooking in Manhattan. After purchasing the office tower at 655 Madison Ave. last year for $160M, Barnett paid $103M this week for three properties right next to it. Extell plans to tear down the buildings and build luxury condos on the Lenox Hill site, according to DOB filings.
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