Mitsubishi Surrenders Rockefeller Center

NEW YORK - The Japanese company that controls Rockefeller Center abandoned its stake today under a deal that would transfer title of the famed office complex to a group including some giants of U.S. industry.

If successful, the deal would end the center's four-month odyssey in bankruptcy court and mark the most striking retreat by a major Japanese company from a U.S. investment.

It also would spell the end of any ownership role by the Rockefeller family, a dynasty of American capitalism that made the 12-building midtown Manhattan landmark an icon of power and prestige.

Poised to enter the fray is a group led by investor Samuel Zell, who has built a fortune by acquiring distressed real estate; General Electric Co. and its National Broadcasting Co. subsidiary; and the Walt Disney Co.

Zell's Chicago-based Zell/Chilmark Fund is known in the Puget Sound area for being the largest shareholder of Bellevue-based Quality Food Centers Inc. Zell's fund paid $99 million last December for 27.7 percent of QFC's stock.

Rivals to the Zell group in its bid for Rockefeller Center, however, may be lurking.

Rockefeller Group Inc., controlled by Mitsubishi Estate Co., announced a plan to surrender the art deco property to Rockefeller Center Properties Inc., the trust that holds its $1.3 billion mortgage. The trust would own the property in partnership with the Zell investors.

"It's a little bit surprising that it's come to this, that they're willing to walk away without slogging it a little further through the bankruptcy," said Wayne Teetsel, an analyst at B.D.S. Securities Corp., a New York brokerage firm.

Rockefeller Center Properties said today it signed a final agreement with the group led by Zell, which would invest $250 million in the property. An initial deal signed last month called for the Zell group to be roughly 50-50 partners with Rockefeller Center Properties. Word on whether that ownership formula had changed was not immediately available.

Further muddying the waters, the investment house Goldman Sachs & Co. filed documents with the Securities and Exchange Commission today outlining a plan to rival the Zell investment.

Goldman and a partnership would buy $100 million of Rockefeller Center Properties stock, about 40 percent of the shares now outstanding, in addition to pumping in up to $150 million in cash.

The filing included a letter to Rockefeller Center Properties, dated yesterday, outlining the offer.

It was not clear if the Goldman offer had been rejected by Rockefeller Center Properties before it announced the definitive agreement with the Zell investors or whether it remained on the table. Trust officials did not immediately return calls seeking comment.

Regardless, it appeared that competing bids for investments in Rockefeller Center Properties would not easily scuttle the owners' decision to give up their stake in the center.

GE and NBC, among the most famous tenants of the center, reached an agreement in principle to join the Zell investment group, according to a statement by Rockefeller Center Properties released today.

Disney is included in the Zell group, which has said that the entertainment giant has its eye on managing or leasing Radio City Music Hall, a 5,874-seat theater that is one of the prime tourist destinations in the center. The center also is known among New Yorkers and visitors from around the world for its annual Christmas tree lighting and a jewel-box of a skating rink.

Japanese companies including Mitsubishi invested huge sums in real estate during the 1980s, when prices were high and affluent investors from Japan were pouring money into everything from Hollywood studios to American golf courses.

Some Americans saw the 1989 Rockefeller Center purchase as an affront to the nation's pride and a symbol of U.S. economic decline.

As real estate prices fell, however, real estate investors had trouble paying their bills. That was true for Rockefeller Center's owners, who sought bankruptcy-court protection May 11.