Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, September 13, 1995 TAG: 9509130045
SECTION: BUSINESS PAGE: B-6 EDITION: METRO
SOURCE: Associated Press
DATELINE: NEW YORK LENGTH: Medium
Rockefeller Center turned into a property gladiator's brawling ground Tuesday after the financially pressed Japanese company that controls the 12-building complex abandoned it and new rival bids emerged.
Mitsubishi Estate Co. and its minority partner, the founding Rockefeller family, said they were walking away from Rockefeller Center, handing the keys to their major creditor because it was too expensive to maintain and too difficult to sell.
At the same time, their creditor teamed with a troika of powerful investors to seek full ownership of the storied array of Art Deco buildings in midtown Manhattan.
Then a rival group led by the blue-blooded investment firm Goldman Sachs & Co. said it was trying to buy part of the creditor, laying the basis for a new battle to gain control of the entire property.
A symbol of American capitalist power and economic might, Rockefeller Center has been languishing in bankruptcy court for four months because Mitsubishi has been unable to pay the $1.3 billion mortgage. The fast-moving developments Tuesday further shrouded who would become its new landlord.
Rockefeller Group Inc., controlled by Mitsubishi, said Tuesday it planned to surrender the complex to Rockefeller Center Properties Inc., the trust that holds the mortgage.
In addition, a group led by Chicago investor Samuel Zell, who has built a fortune acquiring distressed real estate; General Electric Co. and its National Broadcasting Co. subsidiary; and Walt Disney Co. would invest $250 million in the trust and become a 50-50 partner.
The Zell group and the trust would then file a plan of reorganization to bring the property out of bankruptcy.
``It's a little bit surprising that it's come to this, that they're willing to walk away without slogging it a little further through the bankruptcy,'' said Wayne Teetsel, an analyst at B.D.S. Securities Corp. in New York, a brokerage firm.
During a bankruptcy court hearing Tuesday, attorneys for the owners said they hoped to file a reorganization plan by Oct. 3; a hearing to confirm the plan was set for Nov. 28.
Shortly after the hearing, however, the Goldman deal emerged.
The investment house filed documents with the Securities and Exchange Commission seeking a deal of its own with Rockefeller Center Properties.
It appeared, however, that competing bids for investments in Rockefeller Center Properties, or RCPI, would not easily scuttle the owners' decision to give up their stake.
``What we're doing with RCPI is not contingent upon Zell,'' said Albert Togut, an attorney representing the center's bankrupt partnerships.
Under the Goldman proposal, the firm and a partnership would buy $100 million of newly issued Rockefeller Center Properties stock in addition to pumping in up to $150 million in cash through future purchases and by underwriting stock sales.
The filing included a letter to Rockefeller Center Properties dated Monday outlining the offer. Goldman is a major holder of securities convertible into the trust's common shares.
Stephanie Leggett Young, vice president and secretary of Rockefeller Center Properties, said the trust only received the Goldman offer Tuesday morning and the board would review it.
GE and NBC, among the most famous tenants of the center, reached an agreement in principle announced Tuesday to join the Zell investment group.
Disney, included in the Zell group when it was first announced last month, has its eye on managing or leasing Radio City Music Hall, a 5,874-seat theater that is one of the prime tourist destinations in the center.
Mitsubishi's retreat marked the most stunning pullback by a major Japanese company from the spree of American acquisitions in the 1980s, when Japanese companies invested huge sums in real estate.
Some Americans saw the 1989 Rockefeller Center purchase as an affront to the nation's pride and a symbol of U.S. economic decline.
Rockefeller Center Properties shares rose 87 1/2 cents to close at $8 in trading on the New York Stock Exchange.
by CNB