The big news is that Sweden’s Ingka Investments, which owns most of the IKEA stores, has formed a “strategic partnership” with Extell on the 1 million-square-foot mixed-use tower it’s planning for 570 Fifth Avenue. Developer Gary Barnett has long been planning to build a new large skyscraper on the prized Midtown site.
According to Bloomberg, which first reported the deal, Ingka will hold a one-third stake in the project and gain full ownership of the planned retail space.
But while everyone is hopeful that the weed-overgrown expanse between East 46th and 47th Streets will be replaced with a new tower, Inka’s announcement raised some big questions.
1. The building won’t open until 2028. Burnett said in a statement that the deal with Ingka “allows us to move forward with construction on the city’s first tower since the pandemic.”
But when will that be? Extell has not yet begun excavation work or submitted new building plans to the Department of Buildings.
2. Will Extell try to buy the corner building at 576 Fifth, which is being demolished by little-known Korean owner Sae-A Trading, and complete the Barnett apartment complex that lost its north corner?
Two years ago, Saei Co. came out of nowhere and bought the corner lot at an inflated price, costing Barnett the entire west block front he thought he had secured — what became known as the “big gap.”
Sae-A paid an inexplicably huge $101 million for the tiny 12-story building, at least $20 million more than other developers, including Extell, were offering, according to sources at the time.
The new Extell Tower design leaves the old building at 576 Fifth intact, along with its “Jewels on Fifth” sign, but is being demolished floor by floor.
3. What exactly does Ingka have in mind for the new tower? According to the announcement, “IKEA’s new customer meeting point will be located in 80,000 square feet of prime retail space across “two large underground levels” with main street-facing entrances.”
But if it’s going to be a “store,” why not call it that?
Ikea closed its only Manhattan store, the Planning Studio on Third Avenue across from Bloomingdale’s, in 2022. The company said it was “actively exploring new locations in Manhattan that are suitable for a smaller format” after lower-than-expected traffic.
