Rechler sells hotel in Lighthouse deal back to Wang
Rechler, the RXR Realty chairman who brought the smooth negotiating skills of a third-generation developer to the partnership with the hard-charging New York Islanders owner, has quietly sold back to Wang the Marriott hotel at the heart of the stalled Nassau Coliseum redevelopment project, records show.
Some in the business community view the move as a sign of financial pressures, but others take it as an indication that Rechler has written off the likelihood of anything resembling their vision being built in the near future. Neither Wang nor Rechler would comment for this story; neither would Nassau County, which owns the site of the proposed development.
When Wang and Rechler launched the project in 2007, they announced they were binding their business interests together into a billion-dollar master joint venture designed to make them 50-50 partners in every aspect of the deal.
Wang took a silent interest in Rechler's RXR Plaza office towers. Rechler took a silent interest in Wang's hockey team. And Rechler bought Wang's Uniondale Marriott, assuming a $103.5 million mortgage and launching a $40 million renovation.
"We're in the same boat together, for good or bad," Wang said then in an interview. Added Rechler: "At this point, the only ones closer to us are our wives."
But as negotiations with the Town of Hempstead turned sour in 2009, Rechler adopted an increasingly low profile, declining all comment as Wang's pitch for his vision of the Lighthouse met a stone wall from Supervisor Kate Murray.
Last December, weeks after Nassau County Executive Thomas Suozzi, a Lighthouse backer, was ousted at the polls, records of the Nassau Industrial Development Agency show that the two Rechler companies that owned the Marriott, Coliseum Realty LLC and Rex Uniondale Hotel LLC, were transferred to a Wang company: CBW Hotel LLC. Coliseum Realty had also owned a second parcel in the Lighthouse development area.
"They made a request to transfer ownership and as long as the corporations involved are dutifully paying their corporate taxes . . . there is no reason to say no," said Fred Parola, IDA executive director.
Some sources familiar with the situation suggested the move was driven by Rechler's need to retrench his sprawling real estate interests in a difficult economy.
But Rechler lately has been on a buying spree, taking control of a major Long Island office portfolio, launching a $300-million investment fund targeting distressed real estate, and buying half of a Manhattan office tower.
Others believe Rechler sold the Marriott because of the uncertain outlook for the Lighthouse Project, which has made the advantages of yoking his fortune to Wang's questionable.
"I think it's a joint venture in name only," speculated a source familiar with the deal. "They were supposed to be together on the whole Lighthouse deal, so you wonder what's going to happen."
Just who owns how much of the Lighthouse Development Group, the Wang-Rechler partnership that secured the deal with Nassau County to build the $3.8-billion proposal, is unclear. Hempstead spokesman Michael Deery said the town requested but did not receive that information in the affidavit of disclosure the Lighthouse group submitted with its application.
"Before any decision would be rendered on the application, we will, or would have, required it," Deery said.