A major hospital trade association, one of New York City’s most aggressive developers and a financier with a personal interest in health care are teaming up in hopes of building a 60-story glass-and-steel tower on the West Side of Manhattan that would function as an international showcase and permanent conference center for the hospital industry.

The partners — the Greater New York Hospital Association, Extell and Israel Green, a deep-pocketed investor little known outside the real estate industry — say the building would open in late 2013 and would serve as an anchor building for the Hudson Yards, more than 50 blocks of riverfront stretching from West 28th Street to West 43rd Street that make up one of the last parcels of underused land in Manhattan. The Bloomberg administration originally wanted to put a $2 billion football stadium for the Jets on the site, but that notion was blocked by the State Legislature.

Real estate projects all over New York City have been stalled or stopped in their tracks because of the shrinking credit market. But the backers of the World Product Centre, as the tower would be called, say that the prospects for their project — estimated to cost $500 million to $1 billion to build — are uniquely auspicious because the health care industry has proven in the past to be countercyclical and recession-proof, since people always get sick.

In interviews on Wednesday, the developers or their representatives said they imagined the building as a permanent exhibition center for hundreds of vendors to the medical industry, from hospital food and furniture suppliers to pharmaceutical companies and makers of X-ray machines and surgical devices. They have assembled a team of salespeople to begin marketing the 10-year leases that would help secure the financing for the building, focusing their attention on some of the country’s largest health care companies, like Cardinal Health Care, a Fortune 20 company with $90 billion in annual revenue.

Situated on the east side of 11th Avenue between 33rd and 34th Streets, cater-corner from the Jacob K. Javits Convention Center, the tower would also house the headquarters of the hospital association, now located on West 57th Street.

The Bloomberg administration has embraced the project as part of its efforts to wean New York City’s economic base away from the financial industry, which has been its mainstay, and as a way to bolster the tourism industry by filling hotel rooms with medical executives during the off-season.

Lee H. Perlman, president of the for-profit venture arm of the Greater New York Hospital Association, said the centralized location would address Congressional concerns that the financial relationship between hospitals and doctors and their suppliers, including drug and medical device companies, has become too cozy and insulated from public scrutiny.

But real estate executives and others said it would be an uphill fight to convince potential financial backers of the project’s potential to succeed in bleak economic times. They noted that the International Toy Center, a similar concept, failed and is now being converted into offices and residences.

One executive who spoke on the condition of anonymity for fear of alienating Extell said he found it hard to believe that enough companies would commit to 10-year leases in the current market to make the project financially viable. “Under normal conditions, Israel Green and Extell could — and did — raise a lot of money,” the executive said. “They are as smart as they come.”

But he said that over the next 12 months, space would become cheaper to lease, and that it might make more sense to lease than to build. “There is nothing getting done or built that’s over $100 million these days, because you simply cannot get the lenders together to fund it,” the executive said. “In fact very little is being done above $75 million. When you’re looking into a crystal ball, a year to a year and a half looks to us like a train wreck just beginning to hit.”

(LINK to NY Times)