An offer by CBS to donate one of its midtown New York buildings to a startup digital television project is now in limbo as the company mulls putting the property up for sale instead, a network spokesman confirmed last week.
In June, officials from CBS, New York brokerage firm Bear Stearns and the prestigious New York City Investment Fund–a $50 million job development organization started by Wall Street financiers Henry Kravis and David Rockerfeller–were quoted in New York’s Daily News saying that the deal to finance and house the high tech venture, dubbed TeleMedia City, was done.
But sources familiar with the deal began hearing earlier this month that CBS had backed out and that it was instead seeking to cash in on Manhattan’s humming real estate market. A CBS spokesman would not comment on those rumors, but classified the TeleMedia City property deal as being “in limbo,” but “not dead.”
The spokesman explained that CBS is currently “pursuing a series of real estate opportunities” involving all or parts of its sprawling New York headquarters, including its network broadcast center. The CBS official added there are no existing deals to sell any CBS-owned building on the property. Still, CBS’ abrupt about-face regarding the project has some in New York’s investment and new media communities questioning the network’s commitment to digital television programming.
But Kathryn Wylde, president of the Investment Fund, cautioned that the latest development with the Midtown Manhattan building does not necessarily mean the end of the project nor the group’s affiliation with CBS. “We are obviously still hopeful CBS might come up with a space for [the project]. But in the meantime we’re looking for alternative space,” Wylde said.
The New York City Investment Fund is slated to provide $3 million to finance TeleMedia City. CBS would provide the venture with some funding and a two-story building, promising not to charge TeleMedia City officials rent for five years. TeleMedia City, in turn, then was supposed to lease space in the building to fledgling companies that develop digital television programming content. Both sides had christened the move as a signal that New York was primed to become a major hub in the budding digital television industry, with CBS hoping to reap some of the benefits.
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