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NEW YORK - A shopping center developer with big plans for midtown Manhattan has retired $68 million in bank debts owed by the Riese Organization and its family owners in exchange for four of their best locations.
The deal will result in Vornado Realty Trust's acquiring plump parcels of real estate that had been owned by the estate of Murray and Irving Riese - the late founders of National Restaurant Management, the formal name of the Riese Organization.
Vornado paid off about $68 million in debt by retiring a Riese loan with the Bank of Tokyo Mitsubishi Trust. The Tokyo Bank, which had begun foreclosure proceedings for nonpayment, secured the debt with 14 Riese properties.
Under the terms of the deal, Vornado will pay $26 million to the Riese Organization for four of the 14 secured properties. The developer will also provide new mortgages for the remaining 10 secured properties - a deal totaling about $41 million over seven years. At the same time, Vornado will buy out the 50-percent ownership in the 14 properties owned by Irving Riese's daughters for $7 million.
Dennis Riese, president of the Riese Organization, said that while the monetary terms of the deal were substantial, the number of properties that will change hands are slight in relation to the company's other holdings. Of the 14 properties Riese said six were ongoing restaurant businesses.
A pioneer in food courts and one of the most diversified restaurant companies in foodservice, the 50-year-old...