City Comptroller John Liu says Mayor Bloomberg should reopen a sweetheart deal struck in 1998 by the Giuliani administration with the Marriott hotels corporation that, he claims, will end up costing the city $345 million.
"This is one of worst deals since Manhattan was sold for $24," Liu said.
The back story: in 1982, when Times Square wasn't in such good shape, the city agreed to lease land in along Broadway to Marriott on which the company would build the big hotel that now sits on the parcel, the Marriott Marquis. In the deal, Marriott agreed to pay rent equivalent to a percentage of the hotel's annual revenue. After 70 years, or in 2057, Marriott could buy the land for fair market value.
In 1998, the Giuliani administration cut the original 70-year lease in half to 35 years, meaning that the deal ends in 2017. The deal also deleted the payments based on a percentage of revenue in favor of straight property tax, and gave Marriott a decade rent-free. In 2017, Marriott could then buy the parcel for $19.9 million.
That may seem like a lot of money, but today, the parcel is worth $193 million. So, Marriott will get it for a relative pittance in four years, Liu says.More »