Wow. That is a lot of money. Wow.
Dang, i wonder if they can afford their fancy new digs in NYC after this...
New York Daily News -
http://www.nydailynews.com
AOL Time Warner Columbus Circle future uncertain
By ERIC HERMAN
DAILY NEWS BUSINESS WRITER
Sunday, July 21st, 2002
The future is coming to Columbus Circle.
But for AOL Time Warner, the future is far from certain.
As the steel frames rise on the 2.1 million-square-foot AOL Time Warner Center, some in the real estate industry believe troubles at AOL are already altering the company's plans.
"Whatever [space] they were planning on using, they're going to be using a significant amount less," said a real estate source.
Indeed, several real estate executives told the Daily News the company already has plans to sublease some of its space in the new building.
AOL, for its part, says it intends to go forward with the plan to move into its new home.
"We're committed to building our headquarters at AOL Time Warner Center," an AOL spokesman said. "We have no plans to sublease any of our space."
Alternatively, it could sell its interest. But one thing it can't do is bail out of the project.
That could present a problem for AOL, which is obligated to buy 860,000 square feet of office and studio space when the building is complete. Estimates of the purchase price range from $350 million to $450 million.
The building is set for completion in late 2003 or early 2004.
"They can't back out," said Bruce Warwick, one of the project's developers. "They need the space, and they fully intend to go forward."
In November 2000, a team of developers led by the Related Companies broke ground for an ambitious, twin-towered building that includes offices and studios for AOL Time Warner, 191 luxury condominiums, a hotel, shopping, and a facility for Jazz at Lincoln Center.
The residences sell for $1.6 million to $32.5 million. About 80 of the condos have sold. Buyers include singer Ricky Martin and producer Arnold Kopelson.
Related bought the land for an estimated $345 million from the MTA after the agency's deal with Boston Properties fell through. (Boston Properties chairman Mortimer B. Zuckerman also is chairman and co-publisher of the Daily News.) For financial backing, Related partnered with William Mack's Apollo Real Estate Advisors.
Related's commitment from Time Warner - secured before the merger with AOL - helped it beat out other developers bidding for the land. Later, AOL contributed to a $400 million fund to pay for construction. Related went to GMAC for a $1.3 billion construction loan, the largest ever, to pay for the rest.
Having a top media company as a partner in the project seemed like a safe bet back in the '90s. But times have changed. Management turmoil and a plunging stock price have clouded the company's future.
Even so, many brokers predict AOL will occupy the building. Since AOL is purchasing its space as a condominium, Related is guaranteed to get its money, they say.
But Related already is trying to lease 318,000 square feet of additional office space it owns as landlord, according to CoStar Group. In a market already glutted with sublease space, that could pose a problem.
"If AOL takes all their space and subleases it, then it's obviously a competition for them," said Barry Gosin, chief executive of Newmark & Company, a real estate firm.
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http://www.newyorkmetro.com/nymetro/realestate/urbandev/features/6287/
AOL's Faulty Towers
Can the city's other twin towers stand as anything but a memorial to the worst corporate marriage in history?
By Simon Dumenco
(Photo credit: Kenneth Chen)
Your marriage is a wreck, you hate each other, everybody thinks you should get divorced, and yet you're still building a lavish new home together.
That, of course, is AOL Time Warner's predicament. As the company's stock has nosedived, its glittering new headquarters -- the 80-story Columbus Circle behemoth slated for completion in fall 2003 -- has just kept on rising, an insta-symbol not of corporate triumph but of astonishing hubris: A lowbrow Internet company from an airport town (Dulles, Virginia) set out to build itself spectacular offices that would tower over a circle dedicated to the discoverer of the New World. The discoverers of the New Media World -- or so they thought -- were taking Manhattan!
Curiously, though, AOL Time Warner Center won't serve as a true corporate home -- only about 2 percent (around 2,000) of its 90,000-plus employees will work there; it's mostly a gleaming clubhouse for corporate apparatchiks. The bulk of AOL's operations will remain in Dulles.
As for the Time Warner operations, it's as if the betrothed -- skittish before the wedding, hysterically miserable after -- had wisely elected to keep her own apartment. "We were never supposed to move in," says one Time Inc. executive who works at the magazine division's stately, modernist headquarters at 1271 Sixth Avenue. "It'd make sense for us to consolidate. There's not enough room here. But Columbus Circle is about them -- the AOL assholes -- not us."
"The collective response to the new building," says another employee, "is similar to how people are thinking about their 401(k)s: I can't even look because I don't want to know."
Even the supposed star power of the center's 191 condos has some employees down in the mouth. "All you ever hear about is how Ricky Martin bought an apartment," says one. "Remember when he was hot? AOL used to be hot, too."
Worse than the center's inability to attract a celebrity with a current hit single (maybe Enrique Iglesias could get a discount on a duplex?) is the fact that it will be eerily defined by its key attribute. Nan Ellin, editor of the book Architecture of Fear, refers, unnervingly, to the center's "twin towers" and points out that "people around the world will be reminded of the World Trade Center." The connotation could go either way -- it could be spooky and upsetting, or "it could almost seem like a tribute."
But one thing's certain: "The way that people end up perceiving the center," says Ellin, "cannot be separated from the way they perceive the corporate marriage. If the marriage falls apart, people will think of that first."
In other words, the AOL Time Warner Center could come off as the first major memorial to premillennial new-media ridiculousness, a monument to overreaching, overpromising, and overstating (earnings).
It's vaguely reminiscent of what happened to another building from Time Inc.'s not-so-distant past. In the late eighties, Time Inc. spent $185 million to buy half of the then-burgeoning Knoxville-based media empire Whittle Communications. Part of the money went toward building a lavish Knoxville headquarters.
Within just a few years, Whittle went belly-up.
Those with little faith in AOL TW's future might be interested to know that the Whittle HQ is now a federal courthouse, where white-collar criminals and other scofflaws get their comeuppance.
You are so right. It's almost hard to put in perspective.
100 billion days is roughly 274 million years. (I sure hope my math is right. )
Man first appeared in Africa about 2 million years ago.
Scary, isn't it?
Not as scary as this:
US government spending: 1.703 trillion (1999)
Have you ever subscribed to AOL and made requests for technical assistance? Their product is lousy and their service is lousy as well. They deserve to lose money.