Vornado has two Midtown projects in the works. One is 15 Penn Plaza, a 2.8 million-square-foot tower planned for the site of the Hotel Pennsylvania, across Seventh Avenue from Penn Station. Anthony Malkin, operator of the Empire State Building, last year fought to stop the building, saying the 1,215-foot skyscraper was too close to his and would mar the view. The New York City Council approved the project anyway.
Vornado Chairman Steven Roth said in an April 15 letter to investors that the company won't proceed on that tower without a major tenant.
He said at a luncheon last month that the other project, a 1.5 million-square-foot tower that would be constructed on top of the Port Authority Bus Terminal at 42nd Street and Eighth Avenue, may start without a signed tenant, a practice known as building "on spec."
Chinese Investment
An unidentified Chinese investor agreed to put $500 million to $700 million into the project, Crain's New York Business reported in March. The bus terminal was built in 1950 with footings strong enough to support a skyscraper.
Roanne Kulakoff, a spokeswoman for New York-based Vornado, declined to comment.
Roth isn't the only New York developer considering building on spec. Edward Minskoff, who as an executive of now-defunct Olympia & York Developments, helped build downtown's World Financial Center, said he will erect a 413,000-square-foot, 13-story office building at 51 Astor Place, across from the Cooper Union engineering school, from whom he leases the ground.
"There's 26 million square feet of leases rolling in 2013 and this building will be operational April of 2013," he said. "There are no blocks of space in any brand-new, A-plus building that are going to be available in that same time frame."
Minskoff declined to give the cost of the building or detail its financing.
"We'll go conventional financing and my personal equity," he said. "It'll be one of the big major banks that are sophisticated and understand how to finance construction loans."