The Hotel that Never Was

When William Zeckendorf, premier impresario of the real estate world, announced last year his plans to build the first hotel in Manhattan since 1931, the fanfare was deafening. The announcement itself was made from the mayor's residence, Gracie Mansion. A prospectus was bound in red-and-gilt vellum, bore the simple, modest title: "The Greatest Hotel Ever Built." It was to be called, inevitably, The Zeckendorf; it would be 48 stories high, with 2,000 luxury rooms, ten banquet halls, 15 private dining rooms. It would cost $66 million and open in 1961. Ground was broken last summer with more fanfare: city officials and Bill Zeckendorf lined up, like Rockettes in tin helmets, and manned the air hammers.

But then, as the New York Herald Tribune observed, "the excavation subsequently became the city's most conspicuous hole in the ground." (Walter Winchell called it "Zeckendorf's Folly.") A huge hole it was, 35 ft. deep and half a city block long, just northwest of Rockefeller Center. When nothing happened for months, Zeckendorf was repeatedly asked why the delay in construction. One stock answer: during the steel strike he had ordered steel at a special bargain price from Bethlehem, and it would be some time before it was delivered. In fact, no steel was ever ordered. The real hitch was lack of money.

Out of Pocket. Zeckendorf's firm of Webb & Knapp has holes in the ground and buildings under construction all over the U.S. and Canada, was carrying short-term debts of something like $100 million --some at interest rates as high as 20%. With no money to spare from company coffers to build his hotel, Zeckendorf had to find the financing elsewhere. He got off to a typically dazzling Zeckendorf start. He borrowed $16.5 million from a bank to buy the land. Then he turned around and sold the land to the Prudential Insurance Co., leased it back from them. Prudential would also lend him $27.5 million--if he got the building up. With the $45 million within reach, Zeckendorf started digging.

Excavating cost him about $1,000,000; another $1,500,000 went to Toots Shor, whose sporty restaurant on the site came tumbling down. By this spring the estimated cost of the hotel had risen to $80 million, but Zeckendorf was still $35 million short. He scurried around trying to interest Hotelman Laurence Tisch and the Sheraton and Hilton hotel chains in bailing him out. All said no: construction and rental costs for the site were too high to make a hotel pay off.

Wedding Cake. Last week he found a taker: the Uris Building Corp., headed by Brothers Percy and Harold Uris. New York's biggest builders, the Urises have studded the city with wedding-cake office buildings, shaped to fit tightly inside the New York building code "envelope" and provide a maximum of space and a minimum of aesthetics. Zeckendorf's sale price for the lease: $4,500,000. Uris brothers thought they had a good deal, since so much had already been spent in foundation work on the site. Whether Zeckendorf made or lost money and how much was open to question. Even allowing for his rents, digging costs, and other charges, Webb & Knapp probably had a profit.

The Uris brothers already have plans to build, a $75 million, 2,100-room hotel on cheaper land two blocks north on Sixth Avenue. On the Zeckendorf site they intend to put a 42-story office building. The Rockefellers, who had also made Zeckendorf an offer, were not too happy. They wanted a handsome hotel next to the Center, not another one of Uris brothers' economy specials. But the preliminary sketch showed that the new building, at least for the Uris brothers, would break new ground in elegant design.

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