Concerns rased over $56 mil to be spent for Gotham digs
Leaders of the Screen Actors Guild are scheduled to review next week a $56 million, 20-year lease deal for new Gotham offices favored by the branch exec director.
The matter has been placed on the agenda of SAG’s national board, which will meet Monday and Tuesday. Concerns were raised earlier this year by SAG’s finance director (Daily Variety, June 27) that the pact should be reconsidered due to the guild’s worsening financial situation and the lease’s $2.8 million annual cost, or $1 million more annually than the current Times Square site at Viacom HQ.
New York branch exec director John Sucke has been adamant about proceeding with 1999’s lease agreement, which calls for the offices to be relocated in July to a building under construction at 360 Madison Ave. in midtown Manhattan.
He has maintained that next year’s expiration of the current lease and rising midtown rents are forcing SAG to move and claims the 15-year costs of the new space will be $33.7 million compared with $38.3 million at Times Square.
“360 Madison is not only a good choice,” Sucke said in a recent memo, “it is the best choice by far and a phenomenal deal. To cancel that obligation and start over planning our move would be virtually impossible.”
According to a 1999 memo from Sucke, SAG’s lease payments for the final year of the current lease were to be $42.79 per square foot. But Sucke and leasing agent Phil Deguire now say the current SAG branch space is on the market for $70 per square foot for five years, $75 for the next five and $80 for the next five.
Asked about the price hike, Deguire said there had been a 60% increase in midtown rents from the end of 1998 to the end of 2000.
SAG, which has an annual budget of about $50 million, has never disclosed the existence of the lease agreement to the membership at large. The New York office reps 25% of members; Hollywood accounts for 54%, the 23 other branches 21%.