It’s major news that Sweden’s Ingka Investments, which owns most Ikea stores, formed a “strategic alliance” in Extell’s planned, one million square-foot mixed-use tower at 570 Fifth Ave. Developer Gary Barnett has long planned to build a large new skyscraper at the precious Midtown site.
Ingka will hold a one-third stake in the project and have full ownership of the planned retail space, according to Bloomberg which first reported the deal.
But while everyone wants to see the big, weed-strewn lot between East 46th and 47th streets replaced with a new tower, Ingka’s announcement begged some humongous questions.
1. The building won’t open until 2028. Barnett said in a statement the Ingka deal “allows us to move forward with the first tower to begin construction in the city since the pandemic.”
But when? Extell has not yet begun excavation nor filed any new building plans with the Department of Buildings.
2. Will Extell attempt to buy the corner building at 576 Fifth, which is being demolished by its little-known Korean owners Sae-A Trading, to complete Barnett’s assemblage that’s missing its north corner?
When Sae-A unexpectedly swooped in two years ago to buy the corner site at an inflated price, it deprived Barnett of the full west blockfront he thought he had locked up. It left what we called “a large missing tooth.”
Sae-A inexplicably paid a whopping $101 million for the small, 12-story building — at least $20 million more than other developers, including Extell, offered, sources said at the time.
The new Extell tower design shows the old structure at 576 Fifth still there, complete with its “Jewels on Fifth” sign — but it’s coming down floor by floor.
3. Exactly what does Ingka have in mind at the new tower? Its announcement said a “new IKEA customer meeting point will be located in the prime retail space of 80,000 square feet” in “two large cellar levels” with an avenue entrance.
But why not call it a “store,” if that’s what it will be?
Ikea closed its only Manhattan location in 2022 — a “planning studio” on Third Avenue across from Bloomingdale’s. It blamed less-than-expected customer traffic and said it was “actively searching for a new Manhattan location for its smaller store format.