Although it seems like it’s taken forever, the landmarked Battery Maritime Building should finally open as a hotel and dining and event destination by the end of next year.
The city hopes to sign a 99-year lease with Stoneleigh Capital LLC to serve as the project’s new developer and operator within a month, sources told The Post. The deal through the Economic Development Corp. requires the harbor-front job, just east of the Staten Island Ferry terminal, to be finished by Dec. 31, 2017.
South Norwalk, Conn.-based Stoneleigh was tapped after Battery Maritime’s original leaseholders declined to put any more into the project. Costs had soared to at least $25 million higher than the originally estimated $100 million.
But it struck us as odd that the outfit identified as the developer, Dermot Company, couldn’t shell out a “mere” $25 million more. Dermot, after all, is a Manhattan-based powerhouse boasting more than $2 billion in assets, having developed $1.6 billion in residential projects in the city alone.
It turns out the leaseholder was not exactly Dermot — although it was widely reported as such since the lease was signed in 2012, and since “Dermot” was chosen as the developer in 2007.
The lease was, in fact, signed by “10 South Street Landlord LLC.” Although often termed a Dermot “affiliate,” it consists primarily of several individuals — Dermot CEO Stephen N. Benjamin, Dermot co-principal Drew Spitler and now-retired company founder William P. Dickey, as majority partners and members of the restaurant world’s Poulakakos family as minority partners. (The same team is behind the restored Pier A restaurant complex on the Hudson River.)
The Battery Maritime Building is an atmospheric edifice of iron, exuberantly ornamented by copper, stucco and ceramic tiles.
The plan calls for adapting the historic four-story, 140,000-square-foot property for modern use by adding one glass-enclosed floor at the top and modifying a Guastavino-tiled Great Hall on the second floor above the ferry slips. The changes would yield a 70-room hotel, a rooftop restaurant and an event space in the Great Hall.
When completed, it will mark a final step in the post-9/11 reclamation of downtown’s East River waterfront from the Staten Island Ferry terminal to the new South Street Seaport.
Several unpredictable setbacks bedeviled the project almost from the outset, and they proved too much even for five very well-heeled businessmen.
“It is an incredibly complicated project involving the EDC lease, the Department of City Planning, the Governors Island Trust, the Department of Transportation, the Landmarks Preservation Commission, national historic tax credits and lenders,” a source pointed out.
Abatement required after Superstorm Sandy in 2012, and unexpected changes in the federal historic tax-credit program, which chopped $10 million from expected financing, further tightened the screws.
“The partners decided not to invest additional equity. EDC worked with them trying to bring in new capital, but it was their lenders who reached out to Stoneleigh,” a city source said.
Stoneleigh or its affiliates will manage the project if a deal is struck. However, the Dermot executives — although probably not the Poulakakoses — will retain an unspecified, “passive” stake, sources said.
Stoneleigh will pay a low rent to start but it will rise to $1.15 million annually by 2021 and be subject to increases after that.
The city did not need to issue a new request for proposals as the new deal “is principally a lender workout with relatively minor” changes to the original lease.
The changes include adding just two hotel suites, reducing the amount of dining space and enlarging the event space.
The 1909-vintage building has been underutilized for decades. Today it serves mainly as the Governors Island ferry terminal.
It defied numerous city attempts to bring it back to life — dating back to a 1980s scheme by developer William Zeckendorf to build a 60-story office tower on top of it.
The current restoration is now about 60 percent along — “the hard part is done and now it’s basically an interior job,” a source said.
The Dermot-related and Poulakakos partners declined to comment. Reps for Stoneleigh didn’t get back to us.
EDC rep Anthony Hogrebe said, “We’re pleased to be working with Stoneleigh to reactivate this project and bring more than 230 permanent living and prevailing wage jobs to Lower Manhattan.”