The Clocktower on Madison Avenue, the historic building that served as the headquarters of the Metropolitan Life Insurance Company since 1908, is being developed into luxury residential condominiums. The clock tower is part of a full-block property that SL Green Realty Corporation acquired from MetLife for $918 million in 2005. Initially, Ian Schrager and Aby Rosen’s RFR Holding LLC entered into a joint venture arrangement with SL Green Realty Corporation to convert the building.
Schrager described the project as a “very high-end hotel, more like a private club.” While the interior is to be gutted, the exterior of the north tower, familiar to many because of its huge clock and its cupola of Italian gold leaf, cannot be altered because of its designation as a national landmark. In 2007, Africa Israel, an Israeli-owned company owned by Lev Leviev, purchased the Clocktower from SL Green Realty Corporation for $200 million. The Clocktower’s address was changed to 5 Madison Avenue when it was sold to Africa Israel.
Versace was chosen in 2008 to complete the interior renovations for the 55 new residential units that are being built in the clock tower. Plans also include a spa and a restaurant in the 41-story building. Renovations are expected to cost nearly $110 million and should take two years to complete. The value of the building is expected to be about $1 billion after the renovations are complete. In September 2008, Africa Israel announced that it was selling a 50% interest in the Clocktower for $150 million.
In addition to the plans to redevelop the interior of the Clocktower, there are plans to build a new tower on the 14-story building that takes up the rest of the lot, known as One Madison Avenue. The block runs between 23rd and 24th Streets to the south and north respectively and Madison Square Park and Park Avenue on the west and east respectively and the building takes up the south end of the block, with the Clocktower on the north end of the lot.
When SL Green purchased the full site, it was decided that Credit Suisse First Boston (CSFB), whose currently holds a lease for the office space through 2020, would have a 50% ownership stake in whatever SL Green eventually decides to develop.
The right to participate with SL Green in the building’s development opportunities was awarded to CSFB at no charge, but the bank will have to vacate its offices within the Clocktower to allow that portion of the building to be converted into residential condos. Although SL Green has no intention of converting the south Annex into apartments, the deal includes air rights over the south building that should enable it to build another tower, next to the 96-year-old Clocktower.
The landmarking of the adjacent tower would not prevent the use of these air rights. Elad Properties is expected to develop the new, 74-story tower on top of the 14-story south structure. This development is expected to cost $450 million and the building will rise 900 feet. Negotiations are still nascent on the project. The architect for the project is Daniel Libeskind.