Will the NY Wheel ever spin?

Photo: http://www.perkinseastman.com

After recently declining to give the New York Wheel $140 million in support, Mayor Bill de Blasio’s administration and the New York City Economic Development Corporation basically sealed the fate of what has come to be known as Staten Island’s doomed landmark. With no public money earmarked for what the Mayor has called an “expensive, speculative project” and estimated costs for the project skyrocketing from $250 million to $999 million, the 630-foot partially completed attraction may soon be abandoned. But investors are still clinging to hope, imploring the city to support a $380 million bond sale that would enable the project to get back on track. And many borough supporters hope to see its completion.

“Staten Island’s North Shore is at the forefront of the economic boom for the borough and the SIEDC is hopeful that the right investor will take on the New York Wheel project knowing that it will lead to even more off-island investment and further expansion for the St. George area,” said Cesar J. Claro, president and CEO of the Staten Island Economic Development Corporation. “We look forward to continuing to support those who invest in taking our great borough to new heights.”

But plans to continue the six-year effort to bring the attraction to New York City are not looking good. Lead partners Lloyd Goldman and Jeffrey Feil, who control separate commercial real-estate firms, recently told the Washington Post and the Staten Island Advance they will be forced to abandon their plans unless the city changes its position on the bond sale.

That would result in the sale of huge parts of the wheel that are currently sitting in warehouses in Brooklyn and six foreign countries. Lawsuits between the developers and the contractor would also once again resume.

On Sept. 7, the Wheel’s developer and former contractor, Holland-based Mammoet-Starneth, submitted a proposed amendment to the original 120-day standstill settlement agreement with NY Wheel — extending the deadline for getting the project back on track until January 2019. That amendment was approved on Sept. 21, giving the contractor a little more than three months to hire a new contractor to complete the project.

The amendment also states that no additional extensions will be granted beyond that January deadline and if no termination event occurs in one month’s time, New York Wheel will waive its right to ownership of Wheel components by Oct. 23, at which time those parts can be auctioned. Court documents also state that if Mammoet-Starneth and Mammoet USA (MUSA) can prove the financing to purchase the parts, the developer can participate in the auction of the Wheel components, which are currently being stored for close to $500,000 per month.

In addition, the NY Wheel releases all of its claims against Mammoet-Starneth if it doesn’t terminate the agreement by Nov. 7, according to the motion. The amendment also allows Mammoet-Starneth to complete its Chapter 11 bankruptcy plan.

“These benefits allow for resolution of the ownership dispute regarding the Wheel components and for the Debtor to proceed towards an uncontested plan confirmation hearing,” the motion states.

But for now, Mammoet-Starneth will focus on hiring another contractor before January — leaving the fate of this structure relatively unknown.