Vornado Confirms Ken Griffin's Citadel Stays at 350 Park Despite Tax Fight

Citadel's 60% Stake in 350 Park Survives the Pied-a-Terre Tax Fight

Vornado Realty Trust chief executive Steven Roth used the company's second-quarter earnings call to confirm that Ken Griffin's Citadel is sticking with 350 Park Avenue. Roth said Vornado intends to exercise its investment option shortly at the maximum 36 percent ownership level, alongside Griffin as the 60 percent partner and Citadel as a 1-million-square-foot anchor tenant in the roughly $4.5 billion tower.

The confirmation ends weeks of drama that began in May, when New York City Mayor Zohran Mamdani used Griffin's $238 million penthouse at 220 Central Park South as the backdrop for a video announcing a proposed pied-a-terre tax. Griffin and Citadel then threatened to pull out of the development and said they would look at expanding the firm's footprint in Florida. Roth previously called the mayor's video 'irresponsible and dangerous.'

Despite the bluster, Griffin had already signaled he would probably continue with the project, acknowledging that leaving Manhattan entirely was not realistic. On Tuesday, Roth said the joint-venture closing is expected in September, and demolition of the buildings along Park Avenue and East 52nd Street has begun to clear the site for the 62-story Foster + Partners-designed tower.

For Vornado, the confirmation matters because 350 Park is one of the biggest office bets underway in New York. With Citadel locked in as both majority owner and anchor tenant, Vornado's exposure is capped at its 36 percent option while the project benefits from Griffin's capital and leasing commitment. Roth said the company is 'extremely excited and bullish' about the potential returns.

What the September Closing Reveals About Griffin, Vornado and the Tower's Economics

Griffin's decision to stay is not a surprise, even after weeks of threats. In May, Citadel said it would look at expanding its Florida jobs and footprint, and Roth attacked Mamdani's video as 'irresponsible and dangerous.' Yet Griffin also said he would probably continue with 350 Park, effectively acknowledging that a hedge fund of Citadel's scale needs a serious New York presence. The confirmed structure — Griffin at 60 percent, Vornado at 36 percent, Citadel as the 1-million-square-foot anchor tenant — suggests the threats were public pressure aimed at the tax announcement rather than a genuine exit strategy.

Why the 36 Percent Stake Matters to Vornado

Roth's line that Vornado will exercise its option 'at our maximum ownership percentage' tells investors the company wants full exposure to the project. Assuming the $4.5 billion figure covers the whole development, Vornado's 36 percent share would be roughly $1.6 billion — a large single-asset commitment on top of demolition and construction costs. Roth framed it in bullish terms, saying the company is 'extremely excited and bullish about the potential returns from this project.' The counterweight is that Citadel's 1 million square feet is the only publicly confirmed tenancy. The rest of the tower still needs tenants in an office market where trophy space competes with newer and repositioned Midtown supply.

The Policy Fight Left a Mark Without Killing the Deal

Albany passed the pied-a-terre tax that Mamdani proposed, so the episode leaves a lasting policy consequence for future high-end apartment buyers. But 350 Park is a commercial office project, and the tax was aimed at residential pied-a-terres, so it never directly threatened the tower's economics. What changed was the political environment: Griffin was publicly cast as a symbol of luxury real estate in a housing-affordability debate. His decision to remain a 60 percent partner suggests the reputational cost was tolerable relative to the value of controlling a flagship Park Avenue asset in one of the city's largest development bets.

What Investors Should Watch Between Now and the September Closing

• Mark the September joint-venture closing as the next hard milestone. A slip in that date would be the first sign that financing or deal terms changed since Tuesday's call.
• Watch how Vornado funds its 36 percent participation. Based on the $4.5 billion development cost, that stake would be roughly $1.6 billion, and the company's disclosures on debt or equity funding will show whether the commitment pressures its balance sheet.
• Treat Citadel's 1-million-square-foot anchor lease as the floor, not the ceiling. The remaining space needs tenants, so any pre-leasing announcements for 350 Park will be the clearest indicator of whether the bullish return projections hold.
• Read Griffin's future comments about Florida as a tell. His earlier threat to expand there was part of the standoff with Mayor Mamdani; renewed Florida talk after the September closing would suggest he is still hedging his New York bet.
• For market participants pricing New York office deals, 350 Park's closing and pre-leasing will serve as a reference point for how much capital is willing to back new speculative towers in the current market.