Mitsubishi Quits Rockefeller Center; Zell-GE-Disney Troika Moves For Control
NEW YORK (AP) _ The Japanese company that controls Rockefeller Center abandoned its stake today under a deal that would transfer title of the famed office complex to a group including some giants of U.S. industry.
If successful, the deal would end the center’s four-month odyssey in bankruptcy court and mark the most striking retreat by a major Japanese company from an American investment.
It would also spell the end of any ownership role by the Rockefeller family, a dynasty of American capitalism that made the 12-building midtown Manhattan landmark an icon of power and prestige.
Poised to enter the fray is a group led by investor Samuel Zell, who has built a fortune by acquiring distressed real estate; General Electric Co. and its National Broadcasting Co. subsidiary; and the Walt Disney Co.
Rockefeller Group Inc., controlled by Mitsubishi Estate Co., has announced a plan to surrender the Art Deco property to Rockefeller Center Properties Inc., the trust that holds its $1.3 billion mortgage. The trust would own the property in partnership with the Zell investors.
``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.
Rockefeller Center Properties said today it signed a final agreement with the group led by Zell, which would invest $250 million in the property. An initial deal inked last month called for the Zell group to be roughly 50-50 partners with Rockefeller Center Properties.
Word on whether that ownership formula had changed was not immediately available.
GE and NBC, among the most famous tenants of the center, reached an agreement in principle to join the Zell investment group, said a statement by Rockefeller Center Properties.
Disney is already included in the Zell group, which has said that the entertainment giant has its eye on managing or leasing Radio City Music Hall. The 5,874-seat theater is one of the prime tourist destinations in the center.
The center also is known among New Yorkers and visitors from around the world for its annual Christmas tree lighting and a jewel-box of a skating rink.
Rockefeller Center Properties said that in light of the uncertainties surrounding the bankruptcy court proceedings, it is suspending dividend payments for the third quarter.
The swirl of announcements came as a bankruptcy court hearing convened on the property’s future.
``The transaction would permit us to restore the financial health of Rockefeller Center by reducing its debt load and strengthening its capital structure,″ said Peter D. Linneman, chairman of Rockefeller Center Properties.
Japanese companies including Mitsubishi invested huge sums in real estate during the 1980s, when prices were high and affluent investors from Japan were pouring money into everything from Hollywood studios to American golf courses.
Some Americans saw the 1989 Rockefeller Center purchase as an affront to the nation’s pride and a symbol of U.S. economic decline.
As real estate prices fell, however, real estate investors had trouble paying their bills. That was true for Rockefeller Center’s owners, who sought bankruptcy court protection on May 11.
The bankruptcy proceeding set off a battle for control of the center.
The combatants included Rockefeller Center Properties; Mitsubishi; the Rockefeller family trust; Chicago investor Zell; Disney; GE; developer Tishman Speyer Properties Inc.; and others.
The center is home to the headquarters of The Associated Press, the NBC television unit of GE, Simon & Schuster and other high-profile businesses.