American Language Communication Center
The American Language Communication Center (ALCC) is an adult education language school that was located at The Pennsylvania Hotel for 20 years.
In 2005, approximately three years prior to ALCC’s lease expiration date, Studley (now Savills Studley) brokers approached the landlord, Vornado Realty Trust, to restructure the school’s lease for a 10-year term. Recognizing that Vornado was considering redeveloping the site for the Merrill Lynch New York headquarters, the brokers provided the landlord with an option to terminate the lease. The cancellation was conditional upon the tenant’s execution of a Stipulation Settlement Agreement providing for ALCC to vacate with 15 months notice and to receive a seven-figure cancellation fee. In May 2007, Vornado exercised its right to terminate.
Studley assembled a multi-disciplined team comprised of real estate advisors, researchers, financial consultants, architects and expeditors. The team reviewed all building alternatives appropriate for the Use Group 9 Classification for New York City adult education, the school’s student demographics and its preliminary budget.
The lead property, 229 West 36th Street, had been acquired by Real Estate Capital Partners, which was in the process of implementing an extensive building modernization program.
The Studley team provided a detailed strategic process timeline, construction-budget costs, overall financial lease-cost analysis , architectural-value engineering, detailed lease negotiations, and the NYC Building Department Commissioner pre-certification approval for a nonconforming use in the “ Special Garment Center District. “ The team also engaged service lines to provide facilities management.
Early in the process , Studley ascertained that 229 West 36th Street could be exempt from the Special Garment Center restriction of manufacturing and garment center-related use (grandfather clause).
Although the Deputy Commissioner denied the approval twice, the tenant-landlord building expeditor received a favorable ruling on the third try, granting the certification that under a pre-existing use, the nonconforming use would be permitted (SEC.53-10ZRNYC).
ALCC signed a 20-year lease for 70,000 square feet (floors 2 through 6) at 229 West 36th Street, approximately 50% of the building. The landlord’s capital improvements to the building included a private lobby and elevators for the school, tenant-dedicated mechanical systems and exclusive branding with building signage.
The landlord-tenant-Studley collaborative team effort successfully overcame the New York City commissioner’s objection to the use group classification and the team repositioned the building from a Special Garment Center Building Classification to a traditional office building with this long-term lease.
229 West 36th Street,
New York, NY
Education Practice Group, Office
Meet the Team
Executive Managing Director
Corporate Managing Director