The McGraw-Hill building on West 42nd Street is facing foreclosure after owner Deco Towers Associates failed to repay a $140 million loan package to convert part of the office tower into residential units.
Lenders Blackstone and Rialto Capital began foreclosure proceedings against the owners in two separate complaints filed in Manhattan Supreme Court on Tuesday and Wednesday, as first reported by Commercial Observer, which, if successful, would allow the companies to occupy the building.
Built in 1932, the same year as the Empire State Building, the iconic 35-story office tower (330 W42nd St, across from 8th/9th Ave) was one of the most recognizable landmarks in the New York City skyline for decades. Originally the headquarters of McGraw-Hill Publishing, it was later taken over as the offices of the Service Employees International Union. It has been mostly vacant since 2020, when the union withdrew from it.
The seizure could disrupt plans by Deco Tower Associates to convert floors 12 through 32 of the building into residential units.
The now-bankrupt Signature Bank made an initial loan in 2019, then was taken over by Blackstone and Rialto Capital, and asset management firm Resolution Real Estate Partners was set to begin a $120 million overhaul of the building the following year, according to Commercial Observer.
On September 11, 1979, the McGraw-Hill Building (also known as the Art Deco Tower) was granted separate landmark status by the city's Landmarks Preservation Commission, and in 1989, the building and lobby were added to the National Register of Historic Places and designated a National Historic Landmark.
In 1978, Fred Papart, who was also president of the Municipal Art Society, described the lobby to New York Magazine as “flashy and gorgeous, bright golds and silvers and greens. If Fred Astaire had worked in an office building, this would be it.” The building was the original home of Marvel Comics and was also home to W42ST when it first opened.
The building was promoted in 2021 with a glossy, blue-and-pink, Roy Lichtenstein-esque website advertising its renovation plans, referencing its historic past, with the old building positioned against a character reading a comic book about the “New West Side.”
In 2020, community leaders learned that the Landmarks Commission had approved the demolition of the lobby. In February 2021, Theodore Grunewald, founder of the McGraw-Hill Lobby Preservation Alliance, filed a lawsuit to preserve the lobby, but the lawsuit ultimately failed.
State Sen. Brad Hoylman Segal, who previously called the Landmarks Commission “incompetent” for authorizing the demolition, told W42ST that the foreclosure may be “karma from the preservation gods.”
“The McGraw-Hill Building's historic and stunning Art Deco lobby was demolished in 2021, and since then it has faced numerous building code violations and stop-work orders while its owner struggles to repay a $140 million mortgage,” Hoylman Segal said. “We hope that a more responsible steward of this iconic building will be found soon.”
According to the New York City Department of Buildings, the McGraw-Hill Building currently faces more than 50 violations.
Representatives for Deco Towers Associates, Blackstone, Rialto Capital and Resolution Real Estate did not immediately respond to requests for comment.
