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NEW YORK CITY-Vornado Realty Trust has scuttled plans to build a 630,000-square-foot office tower in Harlem that would have housed Major League Baseball’s cable television network, CFO Joseph Macnow said late Tuesday afternoon.

Speaking at the Wachovia Global Real Estate Securities Conference here, Macnow said, “We’ve shut down a couple of development projects. We were going to build the first office building in Harlem in 50 years on 125th Street and Park Avenue. We’ve shut that project down. The economics are not warranted today to do that job.” Macnow also cited a mixed-use retail project in Boston that the Paramus, NJ-based REIT has canceled.

The Harlem Park project, announced in June 2007, was originally slated to contain 540,000 square feet of office and 90,000 square feet of retail on the first two floors. Jones Lang LaSalle was retained to handle office leasing. According to published reports, the cost of building the 21-story tower was estimated at $435 million.

Along with curtailing development, Vornado is also steering clear of acquisitions at the moment. “We haven’t spent one dollar on acquisition in 2008, and will not,” says Macnow. “There’s a good chance we won’t be buying in 2009, either.” Although theoretically the REIT could write a check for up to $4 billion, with funds coming from both its balance sheet and from two revolving credit lines, “We think that capital is irreplaceable today,” he said. Vornado will make new acquisitions only on properties or portfolios that “enhance our franchise.”

Macnow noted that while his company takes a cautious position under the best of circumstances, cautiousness is especially warranted under current market conditions. “Fully one-third of the economy in New York is financial services-related,” he said. “So if that business is going bad, as it is now, there will be a rub-off effect on the entire city and we won’t be immune.”

However, Macnow was sanguine about the effects his company will see from what many predict will be a rash of post-holiday retail bankruptcies. He noted that of the 12 Circuit City locations in the Vornado portfolio, only one–on Gun Hill Road in the Bronx–has been slated to close in the wake of the electronics chain’s bankruptcy. That compares, Macnow said, with the chain-wide ratio of one in four stores marked for closing, and “tells you the strength of the real estate.”

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