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Category ArchiveConstruction

Does 270 Park Avenue Deserve to Be Saved?

When J.P. Morgan Chase announced last month that it would demolish its 52-story headquarters at 270 Park Avenue in Midtown, preservationists and architecture fans were up in arms. The bank said it would tear down the 1961 modernist skyscraper to build a new 70-story headquarters that would house 15,000 employees and 2.3 million square feet of office space.

Architecture writers were quick to point out that 270 Park Avenue—also known as the Union Carbide Building—was an important example of mid-century corporate architecture. More importantly, it was perhaps the first high-rise designed by a woman, according to Curbed architecture critic Alexandra Lange. Natalie de Blois helped lead the team of architects at Skidmore, Owings & Merrill (SOM) that designed Union Carbide, under the supervision of Gordon Bunshaft, partner at SOM. De Bois, one of a handful of high-profile female architects at the time, also played a pivotal role in designing two other corporate icons of the 1950s and ‘60s: the Pepsi-Cola Building and Lever House (both of which are now landmarked).

Since de Blois and Bunshaft’s other well-known Midtown East works have landmark protection, critics argue that 270 Park should be designated a landmark, too.

“The point is not that she did it solo, but she was part of the team that designed this building and was instrumental in the design,” Lange said. “And she wasn’t talked about enough in her lifetime.” She added that the building was unique because in its early years, Union Carbide left the lobby open to the public and organized exhibits on art and finance there.

On Curbed, Lange explained that the building’s gridded exterior was “coated in one of Union Carbide’s latest products and thus, like Lever House’s window-washing apparatus, became a showcase for the company’s chemistry.” (Union Carbide has produced a slew of chemicals and household products since its founding in 1917, including antifreeze, Glad bags and plastic wraps, Energizer batteries, rocket fuel and asbestos. It occupied 270 Park until 1983, when it moved its operations to Danbury, Conn.)  

In his write-up on the demise of 270 Park, New York magazine’s Justin Davidson argued, “The Union Carbide Building deserves to continue existing, not because it was in the vanguard of a movement with a dubious urban legacy, but because it’s among the finest of its kind. The clear glass membrane, stainless steel fins, and slender bones combine to give it a texture and personality that so many imitators lack.”

And 270 Park is one of several architecturally significant structures in the neighborhood that deserve historic protection, preservationists argue. As the city was gearing up to rezone Midtown East in 2016, the Landmarks Preservation Commission (LPC) assembled a collection of properties that could merit designation. Although a dozen buildings were ultimately landmarked, advocates said there are several more properties that should have been seriously considered. Union Carbide topped the list, as well as the Universal Pictures Building at 445 Park Avenue (Kahn & Jacobs, 1946-47), the former Girl Scouts of America headquarters at 830 Third Avenue (SOM, 1957), the MetLife Building at 200 Park Avenue (Emery Roth & Sons, 1963), the National Distillers Building at 99 Park Avenue (Emery Roth & Sons, 1953) and the Lipstick Building at 885 Third Avenue (Philip Johnson, 1986). The landmark commission put another Johnson-designed office tower at 550 Madison Avenue on its calendar last fall after its owners threatened to dramatically renovate the building, but it hasn’t been officially voted on yet.  

“Further consideration of [270 Park] as a landmark is not among the commission’s priorities at this time,” an LPC spokeswoman said in a statement. “As part of the interagency East Midtown rezoning initiative, the commission evaluated buildings in the area, including this one. As a result, we prioritized and designated 12 iconic buildings that represented the key periods of development in the area as individual landmarks, but the J.P. Morgan Chase building at 270 Park Avenue was not among them.”

Not everyone believes that 270 Park is worthy of being saved. Matt Shaw of Architects Newspaper contended that the tower “represents the worst of midcentury American corporate architecture, something that at the time was totalizing, banal, repetitive and dogmatic.” Shaw added that Union Carbide should be remembered as the company responsible for the worst industrial accident in history, the Bhopal disaster in India, a toxic gas leak that killed 16,000 and exposed hundreds of thousands to a lethal gas in 1984. He asked in his publication: “Why not just let 270 Park die a natural death at the hands of the 21st century equivalent of Union Carbide: a multi-national bank? It’s really a beautiful story if you think about it correctly.”  

The disassembly of buildings like Union Carbide is exactly what the city intended when it dramatically upzoned Midtown East in August 2017. Mayor Bill de Blasio’s administration hoped that the new zoning would encourage the redevelopment of the area’s century-old office stock, which has been eclipsed by newer buildings in hipper parts of Manhattan. When J.P. Morgan Chase made its announcement about a new headquarters, the mayor crowed in a press release: “This is our plan for East Midtown in action. Good jobs, modern buildings and concrete investments that will make East Midtown stronger for the hundreds of thousands of New Yorkers who work here.” The development is expected to generate $40 million in improvements for streets and subway stations, which was one of the primary aims of the rezoning.

Still, preservationists were shocked to hear that 270 Park would meet the wrecking ball. “270 Park was not even identified as a development site” because the building already took up much of the site’s potential floor area, said Simeon Bankoff, the president of the Historic Districts Council. “Honestly it took everyone I know by surprise. The rezoning really changed the rules for development in East Midtown.”

When Union Carbide bites the dust early next year, the 1.3-million-square-foot structure—which occupies a full block between Park and Madison Avenues and East 47th and 48th Streets—will be the world’s largest voluntary demolition. It will take that title from the Singer Building, the 47-story, 612-foot tall skyscraper at 149 Broadway that was constructed in 1908 and torn down in 1967 to make room for One Liberty Plaza.

Chase will have to invest considerable time and money in knocking down 270 Park. And the decision to redevelop it comes only six years after America’s largest bank pumped tens of millions into renovating the building, adding eco-friendly features and bringing it up to LEED platinum status. Critics charge that the development will be a big waste of cash, especially since the financial institution already spent untold millions on the renovation in 2012.

“Above and beyond the landmark preservation process being kind of bent for this to happen, this strikes me as a deeply conspicuous consumption and something I find shocking on that level,” Bankoff said.

However, Robert Knakal, the chairman of New York investment sales at Cushman & Wakefield, pointed out that once the bank considered the cost of land in Midtown, it was cheaper to demolish and rebuild at 270 Park than to buy another site and try to develop it.  

“If that was a vacant lot today, the land value would be arguably approaching $1,000 a square foot,” he said. “So by the time they demolish the building, their land basis is going to be less than that. And that’s a heck of a lot less than it would be today.” (Land basis equals what you paid for the property, plus the cost of capital improvements and construction.)

The proposed demolition of Union Carbide also ignited a wave of fear, among preservationists and architecture enthusiasts, that the rezoning would inspire other landlords to knock down large, unique office properties in Midtown East. Knakal argued that probably wouldn’t happen for decades, given how challenging it can be to vacate big commercial buildings and cobble together development sites in Manhattan.

“A number of people have called me and asked, ‘Bob, is this a wave of this happening?’ Of the 16 sites the city projected to take advantage of the Midtown East rezoning, many have seven and eight owners, so it will take a decade to assemble those sites. And then you have to deal with the tenants. There might be 30, 40, 60 tenants. You can’t just say I want to knock the building down, please leave. Unless owners have a very particular set of circumstances with their tenants, it likely isn’t going to happen.”

J.P. Morgan Chase hasn’t released any details on the architects, contractors or developers involved in either the demolition of its old headquarters or construction of the new building, which is expected to be complete in 2025.

Construction experts predict that it will take at least a year to demolish the 700-foot-tall property, which will have to be torn apart mostly by hand.

First, in order to prevent dust and debris from affecting neighboring buildings or people walking by, the project’s contractor will shroud the building in scaffolding or netting. Then workers will have to remove any harmful materials, like asbestos and lead paint, and use hand tools to remove windows, fixtures and doors. The deconstructing of the building comes next. Metal facade panels would be carefully removed by hand. Excavators—like BobCats—and smaller tools would likely be used to break apart the concrete slabs of each floor, although some projects have deployed demolition robots to accomplish the task. In the final steps of the demolition, workers would take acetylene torches to the steel beams and superstructure, cutting the steel into smaller pieces floor by floor.

Ken Colao, of CNY Construction, explained the demolition of such a large building offers an opportunity to think about more efficient ways to take apart skyscrapers. “New regulations need to be developed with the building department to address the demolition of large-scale developments,” he said. “The current method—to enclose it with scaffolding and dismantle it by hand with small equipment—would be too time consuming.”

The contractors on 270 Park could use cranes to remove large pieces of the building. And disassembling the steel frame could be faster if workers cut through pieces of steel, and then a crane lifted the steel onto a truck, he said.

Developers in other countries have used even more unconventional methods: In 2013, a Japanese construction firm demolished a building by jacking up the steel columns with a hydraulic lift, cutting each column with a torch simultaneously, roughly two feet at a time, and then chopping up each floor of a 35-story tower.

Besides the usual worries about dust and noise, construction firms working on 270 Park will have to avoid cutting off the building’s standpipes. If a fire breaks out, firefighters connect hoses to the pipes, which link each floor of a building to the city water system. During the demolition of the 41-story Deutsche Bank Building at 130 Liberty Street—the second-largest building to ever be taken apart in New York—two firefighters died battling a 2007 blaze because they couldn’t reach a working standpipe. The building was heavily contaminated and damaged by the Sept. 11 attacks. Then the fire, sparked by a worker’s dropped cigarette, halted its decade-long, $160 million demolition. The incident forced the Department of Buildings to institute several rule changes, including prohibitions against smoking on worksites and regular inspections to make sure standpipes are maintained.

“When the fireman tried to hook up their hose to the standpipe, there was no water because the standpipe had been cut,” explained Richard Lambeck, chair of the construction management program at New York University’s Schack Institute of Real Estate. “The building department was supposed to inspect the building but they didn’t do it in the periodic way they were supposed to.”

There are also concerns about tearing out the building’s foundation, because it sits atop the Metro North tracks along Park Avenue and could contain asbestos, like many buildings from the 1960s. Colao suggested that the old foundation could be kept, at least partially, and then decked over with a new foundation to support the weight of the new, larger building.

Even with the issues surrounding the demolition of the Park Avenue tower, its replacement will have much more energy-efficient facade panels, windows and building systems.

“These curtain walls have a useful life, they don’t last forever,” said Richard Wood, the head of Plaza Construction, which handled the building’s renovation. “And no one would go back to the 60s era of single-pane glass [windows].”

And protecting buildings like 270 Park may simply be holding the neighborhood back, preventing it from competing with more modern office developments Downtown and on the West Side.

“There’s nothing beautiful about these 1960s buildings,” Wood continued. “[Preservation efforts] are just a way to stop growth and development. I would argue that maybe you would save the facade if it’s an old stone building with hand carving that’s hard to recreate, but I’m sure what they put there will be a lot more beautiful than what’s there now.”

Source: commercial

How Do You Build a NoMad Hotel in LA? R.D. Olson’s Bill Wilhelm Has the Answer

Bill Wilhelm has been a part of R.D. Olson Construction, a leading California general contracting firm, since 1994. Perhaps that’s why he considers his colleagues his second family.

Currently president of the business founded by Robert Olson in 1979, the Southern California native lives in Orange County with his high school sweetheart whom he married 31 years ago and his two children. “I can truly say that the R.D. Olson family means as much to me as my family,” Wilhelm, 54, told Commercial Observer. “The kind of projects that we associate with, 70 percent of our work is through existing relationships, repeat customers. When you have those kind of stats, you love what you’re doing.”

The firm, the construction arm of developer R.D. Olson, specializes in hotel and hospitality—which accounts for 60 percent of the firm’s volume—while also pursuing multifamily housing, country club and retail construction projects. Since 2000, the Olson companies have developed over $1 billion in hotel assets and hospitality projects with a client list that includes Marriott, Kimpton Hotel & Restaurant Group, UDR and Affirmed Housing Group. Based in Irvine, Calif., recent projects Wilhelm has worked on include the H Hotel, a 12-story 260,000-square-foot project located adjacent to the Los Angeles International Airport (LAX), the NoMad Los Angeles downtown, which opened earlier this year, and the redesigned Marriott Irvine Spectrum, the only full-service hotel in the Irvine Spectrum Center area. Annual revenues for R.D. Olson Construction have ranged from $225 million to $245 million over the last three years.

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The H Hotel Los Angeles, Curio Collection by Hilton. Photo: R.D. Olson

Wilhelm’s lengthy tenure has not been without conflict. During the city planning and review process for the redevelopment of a Jack in the Box the company has owned since 2014 into a 21-story hotel called Ivar Gardens in Hollywood in 2017, Wilhelm’s membership in Legatus, an anti-gay, anti-abortion Catholic business leader networking group, brought unwelcome attention. Wilhelm became the target of Unite Here Local 11, a powerful union that represents 23,000 hotel, airport and food service workers in California, which objected to the executive’s ties to the organization. Wilhelm announced in a letter following the union’s protest that he was resigning from Legatus, saying that “some of Legatus’ beliefs regarding sexual orientation and women’s rights do not represent my own,” LA Weekly reported. He told CO through a company spokeswoman that he left his role with Legatus because he didn’t have time to be an active member. (The R.D. Olson-helmed project was ultimately approved by the Los Angeles City Council in August 2017, with one council member saying the discrimination allegations against the contractor were not credible.)

Despite the controversy, R.D. Olson Construction was recognized among the top 20 medium-sized firms as one of the region’s, “Best Places to Work,” by the Orange County Business Journal, which Wilhelm attributes to the company’s entrepreneurial spirit, mixed-generation workforce and community and team engagement. Team events have centered around pro-bono work building homes for Habitat for Humanity, Cal Poly Pomona, Rady’s Children’s Hospital and the Ronald McDonald Corporation.

Olson spoke to CO about the evolution of the hospitality industry, including the rise in Airbnb and changing client expectations.

Commercial Observer: In terms of markets, your company works primarily in Los Angeles and Orange County, correct?

Bill Wilhelm: We’re licensed in 22 states. Today our focus is really the West Coast. Most of our work is in California and Hawaii, with work in California taking us from San Diego to Northern California. Our West Coast presence remains strong. It’s probably 95 percent of our work. However, we are geared up in preparation to start to go to back across the country in anticipation that the market is going to see some adjustments in the next year and a half.

What’s behind those adjustments?

We are seeing enough indications to tell us that in the next 18 months or so we’re going to see a change. We’re already seeing the change. We’re seeing stabilization. What’s driving that is the supply and the demand, world economics and the financial industry. We’re starting to see a little bit of a cap on the demand side even though you have more growth at the airport, you have the Olympics in 2028 and you have the football stadium. We’re going to see more of a controlled growth, versus a dead stop. It will slow the process down for the next couple of years.

Is that related to the Trump tax plan?

In the multi-unit world, yeah. We’re going to see single-family homes for sale potentially slow down because of [changes to] the mortgage write-off deduction. From my chair, that’s going to drive up or enhance the multi-unit industry, which has been on fire and maybe allow that multi-unit to go a bit longer because the single-family homes—which everyone says we still don’t have enough supply—you’re going to see a slowdown in the buying, you’re probably going to see housing prices a year or so out start to cap out or go down a tad.

You mentioned that the NoMad concept is the talk of the hospitality industry today. What is it about the model that is generating buzz?

Number one, it’s an adaptive reuse, which is a whole new market itself. It’s been there for a long time, but in the last five years adaptive reuse has come [more] into play. We have seen a lot of our work go from new construction ground-up to adaptive reuse for all the right reasons. With the NoMad property, here is a chance to go into a building that was built in the early 1900s. There is a storyline. There’s history there. There’s an architectural element that you’re going to capture, reinvent, revitalize, but [we will] also bring a whole new flair. The NoMad, which is part of a group out of New York, [Sydell Group]—they are the hottest thing since sliced butter in the hospitality circuit. They are pushing the envelope on the overall guest experience.

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NoMad Los Angeles Courtesy R.D. Olson

What asset class does your company focus on?

If you look at our hospitality, we’re not chasing the secondary-type market. We’re engaged in the market that is a higher-end project for a higher-end end-user in mainly a primary type market.  

How many employees do you have at the construction arm of the Olson company?

We have 125 employees. Of those 125 we have close to 35 who are field superintendents. We have operations staff and support staff within our building, which is anything from our accounting group to risk management. It’s a nimble-sized company.

What is the biggest challenge you face?

The biggest challenge in any industry is resources—quantity of resources, quality of resources, material availability. Resources are not only what we deal with here at R.D. Olson, but also our contractors, our designers, even city planners. When you look at the city agencies, they are all stretched pretty thin. A lot of people are going to retire in the next five to 10 years. You have aging industries across the board, which is a challenge with the issues we’re dealing with today. The largest percentage of our workforce is going to be the millennials.

Millennials tend to get a bad rap. Are there certain strengths that you see in this generation?

Oh yeah, I’m not one to give them a bad rap because we were all millennials ourselves within our own generational description. They are just a lot smarter than we ever were at that stage of our lives. They have a lot of great things to offer, just like the Gen Xers and the baby boomers have. Our baby boomers and Gen Xers here within R.D. Olson are really welcoming the millennials with open arms and vice versa. They have come together because each generation has been able to bring a unique offering to the table. My superintendents who are 70 years old, are some of the most tech-savvy superintendents you are going to find in the industry and that’s because millennials are investing their knowledge, their experience in them. My millennials are some of the best because my seasoned veterans are sharing with them their experiences on how to deal with certain situations.

What do millennials bring to your company specifically?

Tech, but it’s also the way they look at life. Their expectations. They want it now. Do I agree with all their expectations? No. But if you really step back and listen to what their expectations are and you have a conversation, they’re smart enough to listen to some reason today.

What are you doing to stay ahead of tech and construction trends?

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Bill Wilhelm Courtesy R.D. Olson

We are updating every platform across company lines. We are updating our construction operations software, our accounting software. We are bringing in new technology that allows us to look at buildings three-dimensionally, to understand the building makeup, how these buildings function, how they operate.  All our superintendents work off iPads. Some of them still have blueprints on the job sites, but those are usually building permits that are required by city officials. We’re just now finishing an $80 million 15-story project here in Orange County and we don’t have blueprints aside from the permits. The entire team built this project off our ability to work online and communicate in a concentrated effort with all our consultants, all our contractors and within our own project team.

You are in the process of updating your operations systems.

A year-and-a-half ago I thought we were cutting edge. We were, but nowhere near where we could or needed to be. We made the commitment to literally go across company lines from accounting to business development, to field operations and are enhancing and updating every platform across the board.

What are the latest trends in hotel development? What are clients asking for?

We have seen a [demand for a] lifestyle experience for the last seven or eight years. When people stay in a hotel, they want a nice room, but they also want a public forum, an open area where they can be part of a community gathering. We’re seeing more and more of that. The social, community area is continuing to step up another notch. That can be anything from the quality of the material to the amenities that are provided. Social connection and interaction is probably the top runner right now in the hospitality industry, which also includes your restaurant facilities and what have you. That’s a market that’s on fire right now.

Is Airbnb having a major impact on the hotel and hospitality industry? (Cities across California have put limits on Airbnb, though, as Curbed LA reported on Feb. 8, in Los Angeles, where there are approximately 23,000 listings for short-term rentals, the L.A. City Council delayed a vote on rules on such arrangements.)

I think like everything else, it has taken a bite out of the hospitality industry because it’s another resource, another option for consumers to consider. It takes a percentage away, but when you look at the sheer numbers [in] the hospitality industry—the number of users that are traveling—we’ve seen a significant increase. So, if anything it’s keeping the hospitality industry a little more honest, a little more focused on the goal line, to not take things for granted, as much as we might have in the past. We must focus on the experience because if we don’t three, four, five years from now there might be a greater impact from Airbnb.

Have there been any injuries or deaths on your sites this year?

We did have one death on the job site, but it was non-job related. A gentleman was up on the roof deck in a safe area and he just happened to have a heart attack, which was a hereditary issue, based on what we found out.

Do you only use union labor?

We are nonsignatory to the union so we use the most qualified and competitive subcontractors that are out there.

Is your company facing a labor shortage?

There is a labor-resource issue in the construction industry and building in general. We have a shortage of qualified craftsmen, designers, even as I said earlier, a shortage of city [inspection] officials.

How have you dealt with rising costs on the large-scale multi-year projects you work on?

It’s been difficult. It’s delayed some projects. It has required us to think outside the box in terms of means and methods to offset some of those costs. It has driven the bottom-line cost of development and construction up. And that is only one part of it. If you look at overall development costs, land costs have gone up substantially, design costs have gone up substantially. For a developer that was going to build, say a Renaissance Inn today, to build that same property in the same city is probably 30 to 40 percent more than what he was going to pay seven years ago. But, on the flip side, look at what he is going to get for a nightly rate today compared to what he made back then.

What about construction costs?

Within the construction industry we have seen an increase over the past few years of close to 30 percent increase, most of which is in labor and some in subcontractor margin.

Today construction costs have plateaued. We’re going to see a couple of small increases, but I’m hoping to see a couple of small decreases or at least for it to stabilize itself, versus the last four years.

Where do you think the biggest opportunities in the contracting business are moving forward?

Every project, every state is different. If I just look at the state of California, Title 24 [The California Building Standards Code, also known as Title 24, serves as the basis for the design and construction of buildings in California. Composed of 12 parts, the regulations cover everything from electrical, plumbing and green building standards code], those are things that continue to throw challenges at us. How do you manage the ongoing code enhancements, the ongoing building requirements to meet the end user’s needs? That is one of the challenges of the industry. Construction, in general, outside of resources being a big issue, are the design parameters that are being driven by a lot of factors from code to owner to end-user expectation.

Source: commercial

Emigrant Bank Lends $60M for Construction of Roosevelt Island’s First Hotel

AJ Capital Partners, the developers behind the Graduate brand of hotels, has secured $60 million in mortgages for a new location on Roosevelt Island, according to documents filed in city records today.

The financing is split between a $33.4 million building loan and a $26.6 million project loan. The mortgages come from Emigrant Savings Bank, one of the biggest privately-owned banks in the country and New York City’s oldest savings institution.

Jones Lang LaSalle acted as the financing broker for the five-year floating rate package, according to a statement from AJ Capital. Representatives for Emigrant and for JLL did not immediately respond to inquiries about the financing.

The site, on North Loop Road, lies just south of where the Ed Koch Queensboro Bridge bisects the island parallel to Manhattan’s East 59th Street, adjacent to the plot where Cornell University is constructing a technology-centric academic outpost. At its planned opening next year, the 224-room property will be the first hotel on the island.

The Graduate brand, which concentrates on lodgings near college campuses, has spawned rapidly since its launch in 2014, with nearly a dozen properties across the country in cities like Madison, Wis., Oxford, Miss. and Berkeley, Calif. In addition to the Roosevelt Island project, the brand is developing new hotels in Bloomington Ill., Columbus, Ohio and Providence, R.I.

The Cornell Tech location will be a new building with an interior design that refers to Roosevelt Island’s history, the Associated Press reported. But in other cases, Graduate has bought and refurbished existing properties. In Providence, for example, it acquired the former Biltmore Hotel, a stately landmark in that city that was built in 1922.

Curbed New York reported that construction on the Roosevelt Island hotel—designed by Oslo-based architecture firm Snøhetta—kicked off earlier this month. The site is within walking distance of both the subway station and the aerial tramway terminal that connect the primarily residential East River island to the rest of New York City.

Source: commercial

Flushing Bank Lends $27M on Bronx Production Studio

York Studios has landed a new $26.5 million mortgage from Flushing Bank for its production complex under construction in the Soundview section of the Bronx, according to property records filed today.

The entertainment production company, which already runs a 40,000-square-foot studio in Queens, commenced plans to double down on the industry last summer when it broke ground on new digs at 1410 Story Avenue, just south of the viaduct that carries the Bruckner Expressway across the Bronx River.

The new studio’s first section—which will be more than four times the size of the company’s Queens facility—is set to open later this year, according to the timetable York’s website sets out for the construction period. A second effort will bring the the usable production square footage on the ten-acre site to 350,000.

In all, the company plans to spend $100,000 on construction, according to a statement on its website. Record filed with New York City show that York acquired the lot, which had been vacant for more than 20 years, for $7.1 million in 2012.

In recognition of the 400 production jobs the studio is expected to create, York can count on a $36 million tax break over 25 years, the Bronx Times reported.

York’s Queens location, at 34-02 Laurel Hill Boulevard in Maspeth, has hosted shoots for films including John Wick and The Amazing Spider-Man 2, and the CBS television show Elementary.

Representatives from York and from Flushing Bank didn’t respond right away to requests for comment.

Source: commercial

Arch Companies Nabs $45M for Development of SoHo Rental Building

Still fresh off a New Year’s launch, Arch Companies has secured a $45 million loan from Maxim Capital Group for the development of its first New York asset—a planned six-story, mixed-use residential building at 11 Greene Street in SoHo—the borrower announced Wednesday.

Arch has joined a consortium of investors on the project, taking over from Thor Equities, which previously spearheaded the project’s development, Jeff Simpson, a co-founder of Arch and the former CEO of Greystone Development, told Commercial Observer. Simpson declined to identify the project’s investors or provide specific loan details.

The deal closed last week, and construction is slated to wrap sometime next year.

“I think generally, a rental in SoHo is very unique,” Simpson—who left Greystone to start Arch in December 2017 with colleague Jared Chassen, who was Greystone Development’s director of acquisitions—told Commercial Observer. “There really aren’t any high-end rental and luxury products in the area, but there are condominiums. We’re—generally, at this point in the cycle—very selective in the market and we’re a little more reserved on condominiums.”

Thor was bought out of its partnership in the deal and Arch Companies was brought in to manage the development, eventually obtaining a construction lender to capitalize the project, according to a spokesperson for Arch.

A spokesman for Thor declined to comment on the company’s past involvement in the project or when exactly it exited the partnership.

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The development site at 11 Greene Street. Courtesy: CoStar Group

The project—designed by Gene Kaufman and already underway—will feature 31 luxury rental apartments across roughly 54,648 square feet as well as 11,650 square feet of ground-floor retail space along 240 feet of frontage on Greene and Canal Streets.

“We are currently going vertical and the steel’s being erected,” Simpson said. He said that the retail portion of the project is already garnering attention from several possible suitors but declined to provide specifics.

In May 2014, Jason Pruger, an executive managing director at Newmark Knight Frank, told The Real Deal that some are banking on the transformation of Canal Street into a draw for high-fashion-brand tenants, saying,“it will take a pioneer to make that happen.”

“Arch has made its mark with new acquisitions and ground up development, and it hasn’t taken the company long to demonstrate its entrepreneurial spirit,” Brian Steiner, principal and co-founder of Maxim Capital Group, said in prepared remarks. “At Maxim, we appreciate pioneers, and in our commitment to lending, visionary companies like Arch are top-priority on our list of potential partners.”

This project marks the fourth addition to Arch’s portfolio since the company’s January launch. The firm has closed on the acquisitions of a value-add multifamily property and a single-tenant office building in Los Angeles and has picked up a development assemblage in a Miami suburb.

Maxim Capital could not immediately be reached for comment.

Source: commercial

The Plan: Serendipity Labs at 28 Liberty Street

Office space provider Serendipity Labs likes to say it’s in the “hospitality business,” not in the coworking or office rental industry.

So its first Manhattan location at Fosun International’s 28 Liberty Street (the former One Chase Manhattan Plaza) was designed with more than just office workers in mind.

The Rye, N.Y.-based company, which was founded in 2011, also built out what it calls a “social club” area. It includes a pantry and a separate 75-person conference space for seated events (or 150 standing).

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The idea is that even if you aren’t a member that has signed an agreement for a private office, you can become a coworking member and attend social events in the pantry or host events in the conference center.

To create that cool vibe, the design of the space is sleek and clean. Wood panels are used decoratively on the ceilings and the walls of the pantry. The walls are white, and the tables are made of white marble, evoking the style of a high-end bar. And floor-to-ceiling glass allows natural light into the space and provides views of Lower Manhattan.

“It’s about design for service. It’s about design for hospitality,” John Arenas, the chairman and CEO of Serendipity Labs, said during a tour of the space before it opened to members on Monday. “It’s not just an amenity for the members, it’s a club.”

Onsite will be a general manager, a sales manager and a few experience coordinators. The latter are there for organizing member events including ordering food and decorations.

“Anyone can sign a lease and take a space. It’s what’s behind the elegant space that’s hard,” Arenas said.

Serendipity Labs occupies the entire 34,000-square-foot sixth floor of the building, which sits at the corner of Liberty and William Streets. It can fit about 500 people within its 69 private offices and 18 wooden coworking desks.

In the office areas there are various workspace options, such as dinner-style booths with tables, conference rooms and “focus” rooms (for one person). The focus rooms have opaque glass doors for privacy and can be used for nursing or even prayer.

The floor of the pantry is made of polished concrete and the ceilings are exposed; however, in the private office suites there is carpeting and drop ceilings with acoustic-reduction paneling.

The reasoning behind this feature is that Serendipity Labs wants to provide the protection of privacy for its office members as it targets established companies looking to outsource workspace. (Shared offices for startup companies are less insistent on having privacy and tend to push for more engagement between the companies.) Carpeting and ceiling panels help reduce noise. Plus, the office suites are enclosed in frosted glass so passersby can’t see into them. And the walls that divide the office suites have insulation to reduce noise.

“Our design really has in mind to protect the intellectual property and the conversations of our members,” Arenas said. “Maybe [having less privacy] is fun if you are in your 20s and in a startup. If you are a grown up, it’s not so fun.”

Source: commercial

First Republic Finances Yorkville Resi Tower With $53M Mortgage

Ben Ohebshalom‘s Sky Management has pulled in a $52.5 million mortgage from First Republic Bank, secured by a lot on the Upper East Side where it plans to build a residential high-rise, according to documents that appeared in property records this morning.

Sky bought the deed for 511 East 86th Street, between York and East End Avenues, ten years ago, paying $2.7 million for the walk-up building with eight apartments that the lot then supported. In April of last year, the company filed plans to tear that structure down to make way for a new 22-story tower with 139 apartments totaling 134,000 square feet.

The company has not yet said whether the units will be condos or rentals. Originally, Sky had planned to set aside 35 apartments to low-income residents, but DNAinfo reported last summer that thanks to changes in city housing rules, it would cut that sum to eight. The developer will also rent out about 5,000 square feet on the ground floor and in the cellar to a retailer.

Arquitectonica, a Miami-based firm that has designed the Westin Hotel in Times Square, the Bronx Museum of the Arts and eye-catching office buildings on at least three continents, drew up plans for the new Yorkville development

Representatives from Sky Management, First Republic Bank and Arquitectonica could not immediately be reached for comment.

Source: commercial

Eataly Settles Into Its 67K-SF Digs at Westfield Century City in LA

Like a nice bottle of Italian wine, Eataly L.A. has had time to breathe since it opened.

The crowds that greeted the November opening of the Italian food emporium’s first West Coast location at the Westfield Century City had wait times of up to four hours, proving that, even in Los Angeles, gluten is far from shunned, Matija Blazic, the communications and PR manager at Eataly L.A., told Commercial Observer. (In response to the line insanity Eataly L.A. created a temporary Line-O-Meter on their Twitter account to give would-be visitors an update on wait times by a ranking of hot peppers.)

Eataly L.A. is the largest location for the brand at 67,000 square feet, edging out Chicago’s 63,000-square-foot market. It encompasses four restaurants, multiple kitchens, nine-takeaway food counters, a cooking school, retail space, two chilled wine storage rooms and a clean room with customized pasteurizers to create authentic gelato and mozzarella, built by Clune Construction, a national general contractor with offices in Chicago, Los Angeles, New York, San Francisco and Washington, D.C.

Clune worked closely with Eataly and the architect, STUDIOS Architecture, the commercial interior design firm behind Eataly’s Lower Manhattan property and other high-profile projects in New York, including Nike’s Midtown office at 855 Avenue of the Americas.

Originally launched in 2007 in Turin, Italy, by Oscar Farinetti, the L.A. iteration is the 39th of 40 Eataly outposts around the world. (Amazingly, there is a more recent one: an Eataly opened in Stockholm to much fanfare on Feb. 17.) There is no sign of stopping, with stores planned for Las Vegas starting in 2018 and Toronto in 2019, according to Alex Saper, the COO and partner of Eataly USA.

A few months in, the crowds at Eataly L.A. have become more manageable. On a sunny weekday late afternoon in March, it’s downright peaceful.

The market is spread out over two floors and soon a third, once the rooftop restaurant, Terra, is completed by Clune this spring. Two-interconnected spiral staircases, link the three marketplace floors.

The staircase was no small feat: Clune worked with an out-of-state manufacturer in Minnesota to fabricate the stairs, shipped them to Los Angeles in large pieces and then carefully installed them into the space with the use of a crane.

Each Eataly is built around a theme and for L.A., it’s water, both as an element and its preservation. One of the most distinctive features of Eataly L.A. is a greywater system dedicated to recycling water from hand-washing sinks in restrooms and condensation from refrigerators and reusing it to water indoor plants, an olive tree and to flush toilets. It’s the first of its kind for Eataly and posed unique challenges.

“The greywater system was pretty complex. It’s certainly the first one I’ve worked on in L.A. to this capacity,” Peter Bahruth, the managing director and general superintendent of the west region at Clune, said. “Typically, a greywater system is done inside a building. It’s part of the building infrastructure. This is the first one I’ve worked on in the interior of a client’s space.”

Tanks for the greywater system are visible on the second floor, just outside the cooking school La Scuola di Eataly, and parallel to dessert counters offering gelato and, exclusive to the L.A. location, Cannoli E Bomboloni, which offers made-to-order Sicilian cannoli and stuffed bomboloni.

“Our in-house greywater system reduces the amount of drinkable water we use by 33 percent by collecting all ‘greywater,’ or used water from the hand-washing in our restrooms and the condensation from our refrigeration unit,” Saper said. “Water is the essence of life. It’s crucial to both Italy and our new home in California, especially considering droughts. Basically: water is the one of the main concerns for the future. It’s clear that we need water in our lives; it’s also clear that there’s a problem with our water usage.”

In addition to the greywater tanks, Saper said Eataly L.A. is using technology across the store to save water.

“Our kitchen equipment will use 64 percent less water than a comparable commercial kitchen, saving 5.5 million gallons of water every day,” Saper said. “We are the first Eataly location to have this type of system.”

Bob Dahlstrom, the executive managing director and president of the west region of Clune, said extensive planning was required in the months leading up to actual construction to ensure the plumbing was completely solid. They began with early work, including plumbing and electrical, in July 2016, with the construction phase beginning that December.

“A great deal of attention was paid to making sure it was well-detailed and constructed properly to make sure there would be no leaks,” Dahlstrom said. “There were over 400 penetrations in the third-floor slab that opened up into the second floor. All those had to be very carefully detailed out and built properly to avoid damage to the Macy’s below.”

By all accounts, it was a labor-intensive, but highly-rewarding process. Clune had an on-site staff of eight to handle the project.

“There were a lot of moving parts and not only was it the traditional trade people, we were also working into the schedule certain equipment and finishes that were brought in from Europe,” Dahlstrom said. “There was the bread oven from Spain. There was a pizza oven from France. We had all this equipment that was coming in, we had tile that was coming in and we had the millwork that was made in Italy and installed by Italian carpenters for several months concurrent with our construction.” But that, he said, was part of the charm of the project, recalling hearing Italian work crews speaking in their native tongue. “That was pretty cool.”

Neither Clune nor Eataly would disclose the budget and final cost of the L.A. Eataly buildout.

The fusion of old world and the new—a standard Eataly approach—is evident not only in the mixed crews that constructed the property, but the products and other offerings in L.A.

Like other Eatalys, there are markets scattered on the main floor dedicated to cheese and cured meats, seafood, bread, cut meats and pastries, as well as a large selection of fresh produce and imported Italian groceries. Three restaurants—the seafood-oriented Il Pesce Cucina, La Pizza, dedicated to Neapolitan-style pizza, and La Pasta, (self-explanatory)—are arranged around floor-to-ceiling windows offering a view of palm-tree-lined Santa Monica Boulevard and the hills of Century City and beyond. Eataly L.A., like other locations, enlists local talent among its roster of culinary masters. (Aside from co-founder Mario Batali, whose products were pulled from its shelves in response to sexual assault allegations leveled at the famous chef.) Acclaimed local chef and restaurateur Michael Cimarusti and his co-owner Donato Poto of Providence helm the seafood restaurant. L’Orto dello Chef, Eataly’s take on the salad bar, which was first introduced at their Downtown New York location, will be helmed with a rotating collaboration with local chefs. Currently, Jason Neroni of Venice’s iconic Rose Café, is curating its offerings.

In terms of firsts, Eataly L.A. is the only location where patrons can sit outside, with tables on an outdoor balcony offered to take advantage of the usually pleasant SoCal weather. It also is the only location thus far to offer Roman style pizza—thicker-crust oblong pies baked and served up on wooden pallets—which was doing well with the late-afternoon snacking crowd.

In a nod to California’s established new-world winemaking industry, the West Coast outpost features non-Italian wines for the first time for purchase.

“California and Italy share many similarities, including the climate, which allows us to be even more in touch with the community and pay homage to California’s rich wine tradition,” Saper said.

The West Coast market also offers an olive oil department reminiscent of olive oil tasting rooms and local artisan retailers like We Olive, where customers can sample and fill bottles of select product for purchase. In addition, Eataly L.A. carries the small-batch, hard-to-find White Moustache Yogurt, whose founder Homa Dashtaki makes 288, eight-ounce glass jars a day, filled by hand in a dairy room downstairs. Given the year-round produce available out West Coast, the L.A. outpost debuted the first-ever farmer’s market last Friday amid the usual fresh-ingredient offerings.

“We like to think of our stores as a family,” Saper said. “We are a brand, but each store is slightly different and has its own personality, just like siblings.”

Eataly LA
10 2017 eataly 59 Eataly Settles Into Its 67K SF Digs at Westfield Century City in LA
Rossopomodoro pizzeria
Salumi e Formaggi
La Pescheria
La Panetteria
Source: commercial

Mack Provides $127M Construction Loan for One Prospect Park West

Meridian Capital Group has arranged $127 million in construction financing for the redevelopment of Sugar Hill Capital Partners One Prospect Park West, Commercial Observer can first report.

The loan was provided by Mack Real Estate Credit Strategies. The transaction closed this afternoon, sources told CO.

One Prospect Park West is a nine-story, 169,000-square-foot mixed-use property located on the northwest corner of Prospect Park in Brooklyn.

Sugar Hill purchased the former senior assisted-living facility property in Oct. 2016—paying $84 million, property records show—and will shortly convert it to a luxury apartment building.

The property, formerly known as Prospect Park Residence and owned by Haysha Deitsch, was reportedly in a state of disrepair at the time of acquisition. Sugar Hill’s intention is to restore the pre-war building—erected in 1931—to its former grandeur.

Meridian’s Ronnie Levine, Shamir Seidman and Ben Jacobs negotiated the debt. The brokerage also arranged the acquisition financing in 2016, provided by LoanCore Capital.

“Meridian previously arranged the acquisition financing for One Prospect Park West and is proud to again have represented Sugar Hill Capital Partners in negotiating financing for this transformative project” Levine said in prepared remarks.

Officials at Mack Real Estate Credit Strategies declined to comment. Officials at Sugar Hill could not immediately be reached for comment. 

Source: commercial

Hudson Pacific Properties and Macerich to Redevelop Westside Pavilion

Hudson Pacific Properties and Macerich have partnered to transform the Westside Pavilion mall on the Westside of Los Angeles into a campus featuring 500,000 square feet of creative office space, according to an official joint statement.

Approximately 100,000 square feet of the 600,000-square- foot property will be retained for existing entertainment and retail space. The 12-screen Landmark Theatres complex will remain in the reconfigured mall, as will Westside Tavern restaurant, both of which have performed well and will be “great amenities to tenants,” sources familiar with the deal told Commercial Observer.

The companies estimate total project costs in the range of $425 million to $475 million, with each partner contributing their pro-rata share, according to the official statement. (Those figures include the undisclosed estimated value of the existing mall.) Hudson Pacific will hold 75 percent of the joint venture and will be the property’s day-to-day operator and Macerich, the owner of the property, 25 percent.

The redevelopment, set for completion in 2021, is indicative of the rising demand for creative office space citywide, but particularly on the Westside, home to a large concentration of high-tech, media and start-up ventures. Sources familiar with the deal at HPP, which focuses on acquiring, repositioning, developing and operating high-end office and media and entertainment properties in select West Coast markets, said the venture began receiving inquiries from interested tenants since rumors began circulating about the joint venture and potential office conversion last year.

“Westside Pavilion is a perfect opportunity for us to reposition a marquee asset in a premier location. The project is poised to capture the strong demand from tenants for creative office space on the Westside of Los Angeles,” Victor Coleman, the chairman and CEO of Hudson Pacific, said in the official statement.

The partnership between developer Hudson Pacific Properties and Macerich, also reflects a wider national trend in which struggling shopping malls are being redeveloped in order to survive.

“Our joint venture with Hudson Pacific will enable us to maximize the value of this incredibly well-situated real estate with dynamic new uses,” Art Coppola, the chairman and CEO of Macerich, said in the joint statement.

The Pavilion, which opened in 1985, has struggled with weakening occupancy rates given the rise of online retail and nearby competition, including the Westfield Century City, which completed a $1 billion revamp in 2017. The redeveloped mall has siphoned off business and longstanding tenants from Westside Pavilion, with Nordstrom leaving for the Century City mall last year and Macy’s, which already opened a new store at Century City, closing its location at the Westside Pavilion later this month. The Westfield mall also became home to the first West Coast branch of Eataly, the high-end gourmet Italian food marketplace, which opened last November.

Source: commercial