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Spring’s in the Air: How Palm Springs Went From Desert Getaway to Hipster Playground

Los Angeles is the second-least affordable city in the U.S., for both home renters and buyers, according to the 14th Annual Demographia International Housing Affordability Survey: 2018, a fact that has many heading east—more specifically to Palm Springs.

A desert town located at the base of the San Jacinto Mountains, synonymous with midcentury modern architecture, Palm Springs may have been the playground of the Hollywood elite and retirees, but of late it has become a hotspot for hipsters, telecommuters and members of the LGBTQI community, all looking to reside full-time in a more reasonably priced and slower-paced locale.

Moreover, serious real estate investors see the area’s potential: earlier this year The Desert Sun reported that BlackRock had picked up 167 acres of land with a potential to build some 1,100 homes in the Palm Desert. The price wasn’t immediately available and attempts to reach BlackRock were unsuccessful.

The city of Palm Springs, 106 miles from L.A., was first developed in the 1930s as a weekend getaway L.A. dwellers, but it wasn’t until the 1950s that it gained a broad appeal when Alexander Construction built more than 2,000 contemporary, stylish and affordable tract homes. Today the Alexander homes go for around $500,000, and are a cherished investment.

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In 1908, Palm Springs was practically empty but became a popular winter resort. Getty Images.

Flinn Fagg, the director of planning services for the City of Palm Springs, said in the three years since he’s lived in Palm Springs, his office has seen a marked increase in entitlement requests, primarily for building small-lot single-family homes—one of the greatest indicators in assessing the need for to the city.

“People are looking for detached homes with yards and pools,” Fagg said. “We’ve been busy in terms of applications. If you compare between 2010 until now, we’ve easily increased the applications from 1,200 to 1,700 per year.”

As of January 2018, the average price for a single-family home in Palm Springs was about $495,000, and a condominium unit about $220,000, according to Zillow.

The median sale price for a single-family home in Los Angeles is $704,500 with a 2.9 percent projected increase by 2019 and the median monthly rent is $3,500, Zillow indicates.

Palm Springs is building largely to keep up with those who’re flooding to the desert for an easier and more reasonably priced lifestyle with all the amenities of a vacation destination.

Brad Shuckhart, the division president for the California region of Freehold Communities—a group of developers focusing on lots in Texas, Tennessee, North Carolina, Florida and California—and the project director for Miralon, a Palm Springs-based master-planned community in the works, explained that communities such as Miralon are anomalous in Palm Springs primarily because it is an older community. But developers are confident they must build it, because people are already coming.

“We expect to have a fairly broad draw from millennials to retirees,” Shuckhart said. “The desert does skew older, but it’s unique in the Coachella Valley, which contains the resort cities of Palm Springs and Palm Desert, as well as Indio, La Quinta, Indian Wells and Cathedral City, as there’s a vibrancy that you don’t find in similar communities—meaning there’s more activity across the age spectrum and the lifestyle spectrum.”

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Cate Blanchett at the 27th Annual Palm Springs International Film Festival Awards Gala. Photo by Jason Merritt/Getty Images for PSIFF

He added: “We’ve seen interest in this community from people up and down the West Coast, as well as the Midwest and even parts of Canada. If you are a telecommuter or are retired or going to retire, and you’re looking at cost of living, the desert offers a more affordable way to continue with a lifestyle you’ve become accustomed to, but no longer want to pay for—at least to the extent you’d pay for it in L.A.”

With its year-round population of almost 48,000, historically Palm Springs’ youngest residents tend to leave after finishing high school, but today the city is finding its millennials returning to start their own businesses; three of the desert’s hippest bars and restaurants are owned by four members of Palm Springs High School’s class of 2002.

Between the annual Palm Springs International Film Festival,and the 77,500 people who descended on the town for Modernism Week 2016, it’s clear this little desert resort town has become a cool 21st-century destination.

Taking a unique approach to target a new buyer, Miralon has spent the last several months working with the city to convert the greens (the property was originally built as a golf resort), to what its executives believe is a more diverse and inclusive use of space.

“We’ve changed it to a system of plantings, which are largely olive trees, the fruit of which will be harvested by the [home owners association] through a contract, and pressed into olive oil and made available to future residents and members of the community,” Shuckhart said. “We believe that there is a better way to use the open space that’s more inclusive that would appeal to a broader range of people. Whereas golf may appeal to a subset of those, we believe everyone will enjoy this active open recreational space.”

Miralon will also leverage the existing golf space into hiking trials, offering what it calls “social spaces,” seating areas, Wi-Fi hotspots, community gardens, fireplaces and a club house—an 11,000-square-foot facility with seven or eight buildings all connected by a large shade structure—offering pools, spa, exercise rooms, and even a bar that will operate to the benefit of the HOA, according to Shuckhart.

When Miralon is finished this fall, it will offer 1,150 units, 400 of which will be affordable townhouses priced between $300,000 and $400,000. The balance will be traditional and larger single-family homes with prices in the mid-$700,000s, all built in a modern aesthetic.

In addition to planned communities and new homes, the activity in downtown Palm Springs isn’t just hot hotels like the luxe Arrive hotel, which opened in 2016, or a new Kimpton, which bowed at the end of 2017, but a number of new restaurants, and the tony Uptown Design District (Ezra Callahan, Facebook’s sixth employee, is one investor)—a two-mile stretch chock-filled with over 50 unique interior design boutiques, galleries, shops and galleries located inside stunningly-restored midcentury modern buildings.

“What created the resurgence of Palm Springs is it became accessible,” Tara Lazar told The New York Times in March of 2017. She is a lifelong resident who bought and renovated the Alcazar Palm Springs hotel in 2009 and now owns and operates three local restaurants and a bar called Seymour’s. “It was always for the elite and the wealthy,” Lazar said, “and then all of a sudden, other people could afford to come and stay. There is now a middle market. We have young people in Palm Springs, and that hasn’t happened in more than 20 years.”

The annual Coachella Valley Music and Arts Festival have also raised the profile of the area. Palm Springs has always had the marquis name, but now the city of Coachella has been put onto the map.

Thriving with diversity, all one needs do is take a stroll down the rainbow-flag strewn Palm Canyon Drive, to see that Palm Springs has one of the largest LGBTQI communities in SoCal. Once a conservative outpost, it has become an internationally known place of residence for gays and lesbians.

The city is ranked first in California and third in the U.S. among cities with the most same-sex couples (per 1,000 households), according to analysis of U.S. census data by the Williams Institute at the UCLA School of Law.

The community has a thriving year-round LGBTQI culture for residents and the Palm Springs Pride Festival is hugely popular, honoring the history of the gay rights movement. In November 2017, the city elected an all-LGBTQI city council.

“Palm Springs has become a very inclusive community to LGBTQ folks,” said Gretchen Gutierrez, the CEO of the Desert Valleys Builders Association. “It’s more affordable and it’s a community that has wholly embraced LGBT people.”

She said that although building in the desert isn’t easy, she can’t deny that there is absolutely a demand for housing. And although things can take a couple of years to build after filing for entitlements and permits, it does appear that the building market is growing.

Fagg said he hopes the city doesn’t become too crowded with L.A. folks, as what people like about Palm Springs is that it isn’t L.A. or Orange County.

“It’s a low-rise city,” Fagg added. “It prides itself on having open space and a relaxed style of life. The roads aren’t crowded. It’s walkable and bikeable. If you want to get coffee, you just jump on your bike and go. You don’t have to sit in traffic for 20 minutes, and additionally it’s more affordable than L.A.”

It should be said that Palm Springs is still California, so on-average the cost of living is higher than it would be in the Midwest or a small town, but definitely less than cities such as New York or Boston, and about 8 percent less than the California average.

With additional reporting provided by Max Gross and Lauren Elkies Schram.

Source: commercial

Hudson Yards Stakeholders Dive into NYC’s ‘Newest Neighborhood’ at CO Event

What kind of work goes into rebuilding and renewing a massive chunk of Manhattan, spanning from the High Line up to Hell’s Kitchen and Eighth Avenue over to the Hudson River?

That was the question posed to a select group of developers, architects, engineers and officials helming the transformation of Manhattan’s Far West Side, who gathered at Commercial Observer’s “The Hudson Yards District: New York’s Newest Neighborhood” conference earlier this month to discuss the various commercial and infrastructure developments that are recreating an entire swath of the island.

The event, held on March 8 at law firm Herrick Feinstein’s offices at 2 Park Avenue near Murray Hill, was kicked off with remarks from Patrick O’Sullivan, a partner in the firm’s real estate department. O’Sullivan, a former executive at the New York City Economic Development Corporation, recalled how the development of Hudson Yards was preceded by the proposed West Side Stadium, which was part of the city’s unsuccessful bid to host the 2012 Summer Olympics. After the Olympic bid (which was awarded to London) failed, O’Sullivan said, New York “went to plan B—and it was definitely a good one.”

That “plan B”—most significantly the Hudson Yards mixed-use mega-development helmed by Related Companies and Oxford Properties Group—was the subject of the morning’s first panel, which featured Andrew Cantor, a senior vice president at Related; Andrew Werner, a senior associate principal at architecture firm and Hudson Yards master planner Kohn Pedersen Fox Associates; Colin Brown, a principal at engineering firm Thornton Tomasetti; and Mitchell Moinian, a principal at The Moinian Group, which is developing its own Hudson Yards office tower at 3 Hudson Boulevard.

With Phase 1 of Related and Oxford’s 28-acre Hudson Yards project roughly one year away from opening, Cantor recalled the process that has facilitated the evolution of a neighborhood that historically was “always seen as too far away” from the rest of Manhattan into one that has “changed the way many people view” the possibilities for development in New York City.

Werner noted the “mixed-use” aspect of the project, which seeks to bring residential, commercial and retail uses all within close proximity of each other with the goal of building a “24-hour neighborhood.” From an architectural perspective, Werner said the multi-tower development sought a design with “texture” that would “drive people to want to be there”—a daunting task, considering the site was a “tabula rasa,” or blank slate, that forced KPF to draw on its experiences building “large-scale cities from scratch” in Asia.

Brown, whose firm handled engineering for much of the Related and Oxford project, cited the “great challenge” of building on a site that was an operational railyard—constraints that made it “hard not to be innovative [in order] to make something work,” and called for out-of-the-box solutions like suspending the development’s retail podium above the railyards and building from there.

Moinian was quick to point out that while the Related and Oxford project occupies several square blocks south of West 34th Street, half of the Hudson Yards district at large is located above the thoroughfare, stretching up to West 41st Street. The district at large, he said, will provide newfound “connectivity from Midtown [down] to the Meatpacking District.”

While acknowledging that The Moinian Group’s 2-million-square-foot 3 Hudson Boulevard, which sits on the north side of West 34th Street, won’t be able to take advantage of the “mini-city infrastructure in place for [Related and Oxford’s] mini-city,” the tower will benefit from the development of Hudson Boulevard Park, which will run from West 34th to West 37th Streets, Moinian said. The developer has commenced work on the foundation of the FXCollaborative-designed office building “on spec,” with no advance agreements with office tenants in place—something that shows the extent to which The Moinian Group “obviously believe[s] in the neighborhood,” he added.

hudson yards panels 90 Hudson Yards Stakeholders Dive into NYC’s Newest Neighborhood at CO Event
From left: Robin Stout, Michael Evans and Henry Caso at CO’s “The Hudson Yards District: New York’s Newest Neighborhood” conference on March 8. Photo: Aaron Adler/for Commercial Observer

The second and final panel of the morning focused on the area’s infrastructure, and the developments and improvements taking place to bolster the Hudson Yards district’s transportation offerings and connectivity. Those include the ambitious redevelopment of the James A. Farley Post Office Building into the new Moynihan Train Hall—a project decades in the making that seeks to build “the Grand Central Terminal of the West Side” while relieving the notorious congestion that affects the neighboring Pennsylvania Station, according to Michael Evans, the president of the Moynihan Station Development Corporation.

Work on Moynihan Train Hall is scheduled for completion in early 2021, and Evans cited the logistical obstacles involved when “working within the busiest train station in the Western Hemisphere.” But the project is expected to increase concourse capacity at Penn Station “by 50 percent overnight,” Evans said, and build momentum for further, “critical” infrastructure improvements at the transit hub deridingly referred to by New York Governor Andrew Cuomo as “the catacombs.”

Further west, the Jacob K. Javits Convention Center is in the midst of its own major overhaul, as detailed by Robin Stout, the president of the New York Convention Center Development Corporation. The four-year, $1.2 billion project seeks to expand the convention center’s roughly 400,000 square feet of exhibition space to 500,000 square feet in order “to attract the largest shows,” Stout said.

The expansion will also add 50,000 square feet of new meeting room and breakout room space, as well as a new 6,000-person capacity ballroom that will be “the largest ballroom in the northeast,” according to Stout. There will also be upgrades to the Javits Center’s infrastructure, including a new three-story electrical transformer building and a new truck-marshalling facility that will be built on West 40th Street.

“We don’t want people to think of Javits as low-rise protection for Hudson Yards’ river views,” Stout said. He added the convention center, and the commerce it will bring to the Far West Side, will spur further hotel and retail development and help Hudson Yards achieve its goal of becoming “a vibrant 24-hour neighborhood.”

Source: commercial

Breaking Down LA’s Jordan Downs

Jordan Downs in South Los Angeles looms large in the national consciousness as an example of urban woe—the public housing project in the neighborhood of Watts served as the flashpoint of violence during both the 1965 Watts riots and the 1992 Rodney King riots, as well as was an epicenter of gang violence. But, if the long-harbored hopes of city leaders, including Mayor Eric Garcetti, and developers come to fruition, the redevelopment of Jordan Downs may be a key component in revitalizing the typically underserved community.

The redevelopment of the property at 9800 Grape Street is a cornerstone of L.A.’s $5 billion housing plan that was launched in 2008. The Housing Authority of the City of Los Angeles (HACLA), in conjunction with residents and a broad spectrum of community stakeholders, initiated a plan to rebuild the community into a mixed-use, mixed-income development with new homes, jobs, parks and community facilities. The plan also includes a comprehensive “human capital plan” to provide family support, job training and community programs for residents to move toward self- sufficiency.

HACLA’s vision involved turning Jordan Downs into an urban village replete with green space and retail amenities that could serve as a national model for how public housing could be reimagined. HACLA named The Michaels Organization and the nonprofit BRIDGE Housing as the master developers in 2012, with Primestor Development, a L.A. company with a history of work in underserved areas, charged with the development of the more than 120,000 square feet of new retail space.

jordandowns rendering retail Breaking Down LAs Jordan Downs
The retail component of Jordan Downs Courtesy of Bridge Housing.

According to current plans, the World War II-era complex is one of four public housing projects in Watts to be turned into a modern, 119-acre mixed-income, mixed-use urban village. Fully built, it will be comprised of at least 710 new apartments and townhomes (though the plan is to double the amount of available units), nine acres of green space and a 50,000 square-foot community center. A grocery store, shops and restaurants on Alameda Street and Century Boulevard, which will be extended by a half-mile to connect Jordan Downs to the rest of the neighborhood, are also part of the master plan. Rumor has it that a Nike store is among the retail offerings being considered. (Primestor would not confirm any tenant details as of press time.)

The revitalization of Jordan Downs has been in the works for a decade and its journey has been fraught even by the typical difficulty of affordable housing redevelopment standards, Jenny Scanlin, the director of development of the Housing Authority of Los Angeles, told Commercial Observer. First, there’s the understandable ongoing public distrust of public housing redevelopment given the way that the Housing and Urban Development (HUD) department under Hope IV operated, “where you basically came in and you relocated all your tenants and then you demolished everything and started from scratch.” (HOPE IV program combines rental assistance with case management and supportive services to help very low-income, frail, elderly persons remain in an independent living environment and to prevent their premature placement in nursing homes, according to the HUD website.)

To prevent such wholesale displacement, HACLA purchased a 21-acre industrial site for $31 million adjacent to the site, according to The Los Angeles Times. Originally estimated to cost $5 million to clean up contaminants from the former steel mill site, the effort ended up costing around $31 million and involved filing suit against the property’s previous owners, which included PCC Technical Industries and GK Technologies. (The details of the settlement, reached in 2017, were not disclosed.)

Then there is the “jigsaw puzzle” of patching together funding sources of the 10-year, multi-stage project.

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An aerial shot of the complex. Courtesy of Bridge Housing.

“It would be fantastic to see this happen dramatically, but the hard reality is developing in Watts versus developing in downtown [Los Angeles], you’re not going to have five cranes out doing 70-story buildings,” Scanlin said. “So, it has its own timeline, but it’s a timeline that ultimately serves us well because it will be well-integrated into the community. If we could do it faster, we’d do it faster, but you have to sort of inch along with the funding sources and since we are building in affordable housing into all the phases, we are reliant on tax credit financing, which is our primary tool.”

A ceremonial groundbreaking held last June, which drew Garcetti and other officials and community stakeholders, ushered in the first phase of new residential construction at Jordan Downs developed by BRIDGE Housing, which will consist of 115 affordable rental apartments in 12 buildings on 3.15 acres. The first 115 units will be reserved for tenants who earn 50 percent or less than Los Angeles County’s median income, which is $64,30 this year, according to Curbed LA. Of those units, 72 will be reserved for current residents, and their rents will not increase, according to Scanlin.

Phase 1B, shepherded by the Michaels Organization, will break ground this June. That portion of the project was recently awarded $13 million in grant funding, according to an official company statement. The grant, part of $35 million in funds received by HACLA from California’s Cap-and-Trade program, will provide funding for 81 new apartment homes, affordable to families earning up to 50 percent of the Area Median Income.  Michaels announced it will receive $50,000 in additional grant funds to support neighborhood bicycle safety programs and $1.3 million for a new neighborhood park that is being created on the site in the important and historic neighborhood of Watts.

The commercial component will begin in the second quarter of 2018 with tenants announced over the summer, according to Arturo Sneider, the CEO and co-founder of Primestor. He partnered with Nadel Architects for the design, Davies Associates for graphic design, signage and branding and David Schneider of Fong Hart Schneider + Partners on landscape and hardscape work for the project, which is expected to cost in the $40 million range.

While he could not directly name retailers, Sneider said his company was able to get everything on the Watts community’s “wish list.” These include a full-service supermarket, financial institutions, sit-down restaurants, café s and nationally branded apparel—amenities Watts and other underserved communities his firm has focused on, have typically lacked.

“Basically, the other thing our projects have found over the years is that there is really no interaction for the communities in terms of being sort of a town center that is a well-designed place to be and not just feel rushed or unsafe in any way,” Sneider said.

In Watts, he said, poor urban design by either intention or accident has hindered the development of such an urban center.

“If you look in the grid, we’re putting Century Boulevard in,” he noted. This is a street that should have connected east and eest decades ago and the reality is that it’s just being done now.”

The redevelopment and creation of new commercial projects in Watts is long overdue. The area has the largest amount of public housing west of the Mississippi, and Jordan Downs—one of the largest—housing 2,100 people, according to KCET television station—has typically netted more in the way of empty promises than actual private development dollars. Some of that has started to change, with folks like Roy Choi, the chef behind Kogi BBQ food truck fame, opening an affordable branch of health-oriented fast food restaurant LocoL on 1950 East 103rd Street in 2016, but it’s been slow- and small-going.

Scanlin described it as a “chicken and egg quandary.”

While banks and private investors don’t officially redline, they are averse to invest in new development where there isn’t a track record of development.

“These communities are the ones that really need investments, but people don’t want to invest if they don’t see anyone else investing so then nobody invests. It’s a really vicious cycle that’s a zero-net gain for the community,” she said.

The higher cost of development and construction in areas with higher crime stats like Watts and lower rates of return given the average asking rents have also been deterrents to private investment.

Those spearheading the effort at Jordan Downs hope that its revitalization becomes a major impetus at turning the tide.

“To really strike gold in any of these underserved communities or even just to push the needle in terms of bringing true amenities to the community, you have to have a catalytic project,” Scanlin said. “You have to have a big bang. You have to have somebody coming in to make a sizable investment. That’s one thing we have been able to do with Jordan is really provide hopefully that catalytic moment where we’ve put enough public dollars in, we’ve made a strong enough investment to say we’re going to see this through all the way. The tide hasn’t turned yet, but the private dollars have started to come in in a much more reasonable manner than we’ve seen before.”

Source: commercial

Move Over, Plaza District: Meatpacking Is the City’s New Office Jewel

The names TenJune and Lotus have long since disappeared from the Meatpacking District.

Behold the new names to keep in mind when talking about the area: Google, Live Nation, Alibaba among others.

As companies focus on how to attract and retain employees, they are looking for cool and trendy areas in which to move, and the Meatpacking District has emerged as a top choice, brokers and developers told Commercial Observer.

“You are going to start hearing ‘21st century Plaza District,’ ” said William Silverman, a managing director and group head of investment sales at brokerage Hodges Ward Elliott.

Silverman is co-listing the converted eight-story office building at 430 West 15th Street with Cushman & Wakefield. He sees the influx of big, established companies in Meatpacking as the reason for why it will emerge as the next inevitable high-end office area.

“Fifty years ago your tycoon wore a suit and tie everyday and sent his kids to the Upper East Side [private schools], and they walked to their offices from a classic six on Park Avenue,” Silverman said. “Today, your business tycoon is more likely somebody who lives in the West Village or Chelsea, sends their kids to Avenues and wants to walk to their modern office in Meatpacking.”

And it’s really not that crazy to compare the Meatpacking to the Plaza District in terms of price. The average asking rent for office space in the Meatpacking District was $100.16 per square in the fourth quarter of 2017, up from $77.77 per square foot in the fourth quarter of 2016, according to a C&W report. The Plaza District’s average asking rent was $95.26 per square foot in the last quarter of 2017 and $95.99 in the same period in 2016, as per the report.

The price surge in Meatpacking is attributed to the influx of new developments that command much higher prices and to Meatpacking’s small office stock, which has roughly 5.8 million square feet of space. (By contrast, the Plaza District has about 87 million square feet of office space.) Moreover, Meatpacking only had a 2 percent vacancy rate in the fourth quarter of 2017, according to the C&W report.

Times have changed. Over the past decade, asking rents in the neighborhood mostly were in the $60s and $70s per square foot and even reached the $80s, according to C&W.

“In Meatpacking the decision makers want to be there and their employees do too,” Silverman said. “Meatpacking is a place where you start to see real estate being used as a recruiting tool.”

Meatpacking is bounded by West 17th Street to the north, Horatio Street to the south, Eighth Avenue to the east and the Westside Highway to the west, according to the Meatpacking Business Improvement District, a not-for-profit organization that advocates for the businesses in the area. And while the New York City Landmarks Preservation Commission designated the area a historic district in 2003—making it challenging to redevelop existing properties—developers are still building new projects to meet demand.

Perhaps the most notable of the developments is Rockpoint Group and Highgate Holdings’ renovation and expansion of 413 West 14th Street between Ninth and 10th Avenues. They are revitalizing the 109,515-square-foot property and joining it with the new 144,268-square-foot 412 West 15th Street to create one 255,000-square-foot 18-story office building.

The CetraRuddy-designed tower will be the tallest in the neighborhood at 270 feet and asking rents in the building range from $125 to $200 per square foot. So far six leases have been signed, totaling about 65 percent of the building, according to CBRE’s Paul Amrich, who is leasing the building with colleague Neil King.

In one of those deals, Paris-based asset management company Tikehau Capital signed a 10,000-square-foot lease for the top two floors of the building at $195 per square foot, according to The Real Deal.

“We started to see this area truly appeal to office tenants in general maybe eight years ago. What’s been really interesting is the change of industry type and maturity of tenants,” Amrich said. “In the past it was fashion firms and [startup] tech companies. Now, it’s insurance and financing companies.”

Aurora Capital Associates, which owns numerous buildings in Meatpacking, and Vornado Realty Trust recently completed a 165,000-square-foot building at 61 Ninth Avenue between West 15th and West 16th Streets. The property features 145,000 square feet of new office space with 12-foot ceiling heights and 20,000 square feet for retail. It also has private terraces on each floor as well as a rooftop green space.

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860 Washington Street. Photo: CoStar Group

And Aurora Capital and William Gottlieb Real Estate are finishing construction of a new 139,000-square-foot office and retail building at 40 10th Avenue between West 13th and West 14th Streets. The Studio Gang Architects-designed building, which is called the “Solar Carve Tower,” has office asking rents ranging from $135 to $200 per square foot.  

“It has unparalleled views of the Hudson River, the High Line, 15-foot floor-to-floor ceiling heights, uninterrupted views and an incredible roof deck,” said Jared Epstein, a vice president and principal at Aurora Capital. “It connects Meatpacking with the [Hudson] River and the High Line.”

In 2016, Romanoff Equities, the family development firm of C&W Vice Chairman Stuart Romanoff, and Property Group Partners completed the 114,000-square-foot glassy 860 Washington Street, just off the High Line. The office property has attracted Chinese e-commerce giant Alibaba, developer Delos Living and online lender SoFi as tenants.

“We produced on spec the project understanding that there was such demand by tenants who felt they needed an alternative to Midtown product, because the need to be in Midtown has changed,” Romanoff said. “Tenants want to be in more creative areas.”

And older properties are fetching top rents in Meatpacking as well.

Even corporate tenants want cool space,” said Leslie Himmel, a partner in Himmel + Meringoff, who has looked at buying buildings in the area. “They want exposed brick, open floor plans, wood, where they can see the bones of the building.”

William Kaufman Organization completed a repositioning of its 1912 property at 2 Gansevoort Street in 2015 with the addition of a new artwork-focused lobby, replacement of all of the windows and construction of an outdoor roof deck on the ninth floor (the top floor). At the time the asking rents in the Class A property were in the $100 to $115 per square foot range.   

The roughly 200,000-square-foot building, which William Kaufman Organization has owned since 1948, is fully leased save for the seventh floor and achieved rents in the high $80s per square foot and more than $100 per square foot for the top floors, according to Jonathan Iger, the CEO of William Kaufman Organization and the chairman of the Meatpacking BID.

On the seventh floor, William Kaufman Organization created a shared office floor called Swivel. Amenities for Swivel tenants include a pantry, a lounge, meeting rooms and conference rooms in a core area of the floor. In addition to the shared space, there are five prebuilt office suites that range in size—between 3,604 square feet and 5,677 square feet—with asking rents of $110 per square foot, Iger said.  

Since marketing for the Swivel office suites commenced in February, the landlord has already signed a lease and is in talks with three more tenants, Iger said. (Iger declined to name the tenant it has already placed in Swivel because of a contract agreement.)

As a testament to the area, Iger also noted that when Coronado Biosciences, a Massachusetts-based biopharmaceutical company, leased the ninth floor after the renovation of the property, the tenant informed him it looked at only two other properties in the city before choosing 2 Gansevoort Street: the GM Building and the Seagrams Building in the Plaza District.  

A big part of choosing 2 Gansevoort Street was the allure of the Meatpacking District and appealing to millennial employees, Iger said.

“I don’t think within a six-block radius [in the city] there is a better offering of food, culture and fashion that you can find with an office environment,” Iger said. “You see Google gobbling up as much space as they can. I think that we are just so centralized for everything that a young millennial employee wants.”

gallery at 2 gansevoort rainbow mountains Move Over, Plaza District: Meatpacking Is the Citys New Office Jewel
The gallery in the lobby of 2 Gansevoort Street. Photo: William Kaufman Organization

The Meatpacking District may have gotten its name from the 250 slaughterhouses that filled the area in 1900, but today it’s all about Google. (There are still a few meatpacking businesses left there.)

The tech giant purchased the 3-million-square-foot building at 111 Eighth Avenue between West 15th and West 16th Streets for $1.9 billion in 2010 and essentially has put its stamp on the area as it expanded numerous times since.

Most recently, in 2017 the company grew by 60,000 square-feet to 240,000 square feet at 85 10th Avenue between West 15th and West 16th Streets, as CO previously reported. And at Pier 57, Google plans to tack on 70,000 square feet for offices and 50,000 square feet for public engagement space to the 250,000 square feet it has already leased.

And instead of increasing its 400,000-square-foot offices at Chelsea Market, the tech giant has purchased the entire 1.2-million-square-foot building from Jamestown for $2.4 billion, as CO reported yesterday. (Google did not return a request for comment on its Meatpacking takeover plans, and a spokeswoman for Jamestown declined to comment about the sale.)

Google’s hardly the only household name to plant—or to soon plant—its flag in Meatpacking: Concert promoter Live Nation took an 100,000-square-foot sublease for the entire eight-story building at 430 West 15th Street between Ninth and 10th Avenues last year. And insurance company Argo sealed a deal for 48,000 square feet at 413 West 14th Street, as CO reported in March 2017. (Just a block outside of Meatpacking, coworking giant WeWork recently signed a lease for 122,000 square feet at 154 West 14th Street.)

Also, Insurance giant Aetna inked a 145,000-square-foot deal at Vornado and Aurora Capital’s 61 Ninth Avenue to relocate its headquarters from Hartford, Conn., as CO reported last June. It had plans to take all of the office space at the 165,000-square-foot Rafael Viñoly-designed building, which has a retail base.

A spokesman for Aetna declined to talk about the lease in depth but said that “CVS Health [which announced plans to acquire Aetna in December of 2017 for $69 billion] has no plans to relocate Aetna’s operations from Hartford after the transaction closes.”

With a signed lease, though, Aetna is on the hook and will have to find subtenants.

“We’ve been told that they might make a profit,” Epstein said. “In any other neighborhood that lease would be a big obligation.”

In keeping with the trend going on citywide, and even nationwide, Meatpacking retail tenants are trying to make their spaces more experiential.

aurora 40tenth 02 aerial 111616 Move Over, Plaza District: Meatpacking Is the Citys New Office Jewel
40 10th Avenue. Rendering: Aurora Capital Associates

A case in point, Starbucks plans to open a 20,000-square-foot store for a café and roastery on the ground floor of 61 Ninth Avenue, the second in the country (a third was recently announced for Chicago). Restoration Hardware took a lease for the entire 70,000-square-foot building at 9-19 Ninth Avenue between Little West 12th and West 13th Streets so it could build a gallery with a rooftop restaurant. It also plans to open a boutique hotel at 55 Gansevoort Street between Washington Street and Ninth Avenue.

Tesla Motors recently opened a 7,800-square-foot showroom at 860 Washington Street between West 13th and West 14th Streets and Genesis Motors (the luxury brand of South Korean car maker Hyundai Motor Company) will open a 40,000-square-foot location at 40 10th Avenue between West 13th and West 14th Streets.

Intersect by Lexus, a lounge, gallery and event space by the automaker, is at 412 West 14th Street. And Samsung is leasing the entire Morris Adjmi-designed 837 Washington Street, a 55,000-square-foot building between Little West 12th and West 13th Streets, where it doesn’t actually sell anything. Customers can test devices, experience virtual reality, see art installations, watch videos on a three-story screen and attend events.

“These are all best-in-class companies and they are all choosing that’s where they want to do their experiential concepts in New York City,” Hodges Ward Elliott’s Silverman said. “Meatpacking is emerging as where all the best companies in the world are doing business.”

With additional reporting provided by Max Gross.

Source: commercial

A Massive Rezoning Promises to Remake the Central Bronx

Beneath the elevated 4 line on Jerome Avenue in the Bronx, auto shops bump up against drug stores and bodegas, pizza places and dollar stores, schools and doctors offices, hair salons and juice bars. Noisy, dirty muffler repair and auto glass shops dominate blocks and blocks of the busy thoroughfare, but a city plan to encourage redevelopment in the neighborhood is raising questions about the fate of the auto shops and their workers.

After three years of planning and contentious public meetings, the city is finally getting ready to rezone 92 blocks of Jerome Avenue, running from 165th Street in Highbridge to 184th Street in University Heights. Along the way, Jerome also passes through Concourse, Morris Heights, Mount Hope and Fordham Heights. These are some of New York City’s poorest neighborhoods: The median family income hovers around $25,900 in Bronx Community Districts 4 and 5. Two thirds of the housing stock is rent-regulated, and 80 percent of the apartments and homes were built before 1947, according to the Department of City Planning.

Most of Jerome is zoned for heavy commercial uses, like auto shops, parking lots, car washes and gas stations. And while the car repair industry and various kinds of small shops have proliferated, residential development is nonexistent. In early 2015, Mayor Bill de Blasio’s administration realized that the strip of low-rise commercial buildings along Jerome was ripe for redevelopment, and the neighborhood could play an important role in the mayor’s initial plan to build and preserve 200,000 affordable units by 2022. (The administration upped its goal last November to 300,000 units by 2026.)  

The rezoning would pave the way for new mixed-use, midrise residential buildings—up to 4,000 apartments, 440,000 square feet of retail and 40,000 square feet of offices across 45 development sites. And the new construction would displace roughly 98,000 square feet of auto-related businesses and 48,000 square feet of industrial space, according to city zoning documents. While the city has promised to spruce up local parks and improve lighting under the elevated subway tracks, activists wonder whether the new zoning will ultimately put the owners of auto shops, as well as their hundreds of employees, out of work. Neighborhood groups are also uneasy about how much of the new residential construction will be affordable for locals.

“Our community cannot be expected to accept additional density without seeing significant investments made in our neighborhood that we truly need today, that we needed yesterday, and the day before that, and the day before that,” City Councilwoman Vanessa Gibson said during last week’s hearing. “This plan cannot and must not move forward without real investments and protections for our residents and small businesses.”

She’s pushing for the city to build several hundred new school seats in the neighborhood, fund the renovation of 12 parks, commit to a local hiring plan for construction projects and develop a plan to help potentially displaced auto shop owners and workers.

Jerome Avenue will be the fourth major neighborhood rezoning orchestrated by the de Blasio administration, after the fiery and rushed effort to revamp East New York, Brooklyn, approved in April 2016, the under-the-radar rezoning of Far Rockaway, Queens, and the drawn-out, contentious rezoning of East Harlem that passed last November.

“Overall the neighborhoods that are being rezoned are mostly low-income communities of color,” said Emily Goldstein, a senior campaign organizer at the Association for Neighborhood Housing and Development (ANHD). “They’ve all had many years of disinvestment, and now they’re facing this idea that, in order to get reinvestment they’ve needed all along, it has to come with a rezoning. I think there’s huge concern of how these shifts in the market will affect displacement. There’s a question of what’s going to get built and for whom.”

On the housing front, advocates have scored two major victories since the city held its first round of public meetings on Jerome in the summer of 2015. Last year, the City Council signed off on two major pieces of tenant legislation that will help protect the working-class, rent-stabilized tenants of the south and central Bronx from displacement. The first, passed in April 2017, was the right to counsel in housing court, which guarantees a pro-bono lawyer for all tenants facing eviction who earn up to 200 percent of the federal poverty line. The second was the creation last November of a certificate of no-harassment program (CONH), which requires landlords to prove to the Department of Housing Preservation & Development (HPD) that they have not harassed tenants in order to get building permits for new buildings or demolition.

The Jerome Avenue proposal has wound its way through several stages in the seven-month-long public review process, winning conditional approvals from Community Boards 4 and 5 and the Bronx Borough President. Last Wednesday, a City Council subcommittee held the final public hearing on the rezoning, before the plan heads to the full council for a vote and final approval in late March. In the meantime, the area’s two councilmembers, Gibson and Fernando Cabrera, will hammer out the finer points of the land-use rules and community benefits with the de Blasio administration.

proposed zoning map cmyk A Massive Rezoning Promises to Remake the Central Bronx
Proposed Jerome Avenue rezoning. Image: Department of City Planning

Auto Shops Being Driven Out for Good?

Despite some key housing victories, neighborhood activists still worry about the fate of Jerome’s auto shops, which are largely owned and staffed by Spanish-speaking immigrants. The majority of auto repair workers along Jerome only have a high school education, said Pedro Estevez, the head of the United Auto Merchants Association. Since many of the auto shops will inevitably be priced out of Jerome, he argued that the city should step up and fund new training programs, relocation costs and initiatives to help bring the remaining auto shops into compliance with the new zoning. The strip holds roughly 200 car-related businesses, car washes, gas stations, used car sellers and auto repair, muffler, glass and tire shops. Eighty-nine percent of those businesses only have one-year commercial leases or no lease at all, according to Estevez. City planning documents predict that 43 auto shops and 45 non-auto-related businesses are likely to be pushed out, but critics think those are low-ball estimates.

During last Wednesday’s public hearing, Estevez unveiled an “Auto Business Readiness Plan,” which would create a $4.5 million training center that would offer workshops and classes to workers and help them learn new automotive technologies. He also pitched the idea of developing a new five-story commercial building that would house up to 200 car-related businesses as well as ground-floor retail in a different Bronx industrial area.

“The city’s not offering anything,” Estevez told Commercial Observer. “They’re going the same route as Willets Point. But they’re using a rezoning instead of eminent domain…When the Bronx was burned down, these [business owners] built that [Jerome] corridor out of the ashes. They put their blood, sweat and tears into it, every day, rain or shine, coming to work.”

At Willets Point, next to Citi Field in eastern Queens, the city has seized several blocks’ worth of auto shops through eminent domain to clear space for a planned development with 1,100 affordable apartments, a school and retail. Some business owners, faced with the costs of setting up shop elsewhere, simply closed, and hundreds of Latino autoworkers lost their jobs. Forty-five auto shops tried to relocate to an auto mart in the Hunts Point section of the Bronx called Sunrise Cooperative. The city Economic Development Corporation gave Sunrise $7 million to help the group rent the warehouse at 1080 Leggett Avenue and build out a new home for their operations in 2014. Then after the group fell behind on its lease, the agency provided another $2.5 million last year in order to help Sunrise catch up on its rent. But the landlord refused to accept the cash and ultimately evicted the auto shops last fall.

Back on Jerome, planning officials said that the city expects to offer loans of up to $250,000 to small businesses that want to grow, relocate or meet the new zoning requirements by getting the right licenses or permits. A spokeswoman for the Department of City Planning also pointed out that the plan for Jerome has been changed to ensure that a few blocks of industrial, auto-business-friendly zoning remain along the corridor.

Gibson also said that she wanted the city’s Department of Small Business Services to create community coordinators that would help owners on the corridor navigate challenges created by the rezoning and educate them on city-backed grants and loans for small businesses.

“I’ve always had a commitment to protecting as many of the auto workers as I can,” Gibson said. “No one likes the way [Jerome] looks today. But [improvements shouldn’t come] at the expense of displacement…I don’t want to repeat the failed venture at Willets Point. The challenge is that if they stay, how do we allow them to operate better, to look better? We want to offer them a chance to move to another part of the Bronx. I don’t want to hear from the city that the only thing we have to offer small businesses is a loan. ”

‘Affordable for Whom?’

Before one of the first big public meetings on Jerome in October 2016, more than 100 neighbors marched up University Avenue to Bronx Community College’s library and chanted, “Whose Bronx? Our Bronx!” and “Affordable for whom?”

Many housing advocates and developers agree that for now, most of what will be built along Jerome Avenue will be subsidized affordable housing. Adam Mermelstein, whose firm Treetop Development is building a 400-unit residential project in the South Bronx neighborhood of Mott Haven where 20 to 30 percent of the units will be affordable, said that the rents along Jerome are still too low to support the construction of housing without subsidies.

“I think it’s going to be difficult for folks like myself to come and build market-rate unsubsidized units in this area, at least at the current rent levels of the central Bronx,” he said. “I think the first wave will be the tax-credit developers or the affordable developers, and then the later wave will be the market-rate developers.”

The open question is, Just how affordable? Will the average family in Highbridge or University Heights, earning $20,000 or $30,000 a year, be able to rent an apartment in one of these new developments? The answer is a little unclear.

Gibson predicts that roughly 45 percent of the housing constructed in the wake of the rezoning will be permanently affordable. However, she doesn’t think the city will be able to provide a breakdown of how many of those units will be within financial reach for low-income renters. The HPD is in the midst of financing several below-market development projects in the neighborhood, Gibson said, and existing affordable-housing financing programs will help ensure that some percentage of the new units house folks earning $30,000 or less. (Planning documents predict that 2,243 low- to moderate-income units will be built by 2026, but they don’t say how many will be affordable to current residents. An HPD spokesman said it will encourage developers who use city financing programs to build 100 percent affordable housing. However, the agency said it can’t predict exactly how private land owners will develop their sites and couldn’t give estimates of how much low-income housing will be built after the rezoning.)

A handful of landowners in the area have already committed to building 100 percent affordable housing. Maddd Equities, for example, is planning 720 below-market rentals at 1159 and 1184 River Avenue, set to be financed through HPD’s Extremely Low and Low Income Affordability (ELLA) program.

Since the city reduced the size of both the East New York and East Harlem rezonings, activists argue that the Jerome rezoning—which has actually grown to cover 22 more blocks as the planning process has advanced—should be cut in half. Members of the Bronx Coalition for Community Vision contend that the new zoning should cover 46 blocks, instead of 92, and produce 2,000 units instead of 4,000. If there are fewer new units built, it’s more likely that the city will be able to subsidize them and create a generation of entirely below-market housing. And a smaller rezoning will affect fewer existing residential buildings. That means fewer landlords of older rent-stabilized properties would have incentive to cash in on rising property values by harassing tenants or selling, activists claim.

A smaller rezoning might also mean less gentrification when the central Bronx finally can support new market-rate housing, which could be in the next decade or so.

“Ten years is not that long in the landscape of a community,” said ANHD’s Goldstein. “What are the shifts going to be? And to what extent is this rezoning going to move those faster and in the direction of less affordability?”

Jason Gold, an investment sales broker at Ariel Property Advisors, compared Jerome to the rezoning of Mott Haven in 2009. After several years of sluggish real estate activity, the formerly industrial South Bronx neighborhood is suddenly flush with new, market-rate construction. Chetrit Group and Somerset Partners are building a 1,300-unit, six-tower market-rate rental complex along the Mott Haven waterfront, and Tahoe Development is putting up a 47-unit condominium project at 225 East 138th Street. There’s also Treetop’s two-building development at 414 Gerard Avenue, which will be 70 to 80 percent market rate, with the remainder of the units renting through the affordable housing lottery.

While the new zoning along Jerome might push up investment sales numbers and property values, Gold agreed that developers aren’t going to build much market-rate housing there in the next few years. The development potential of many sites on the corridor will quadruple overnight, but “I don’t see a developer buying a property that was recently rezoned and kicking tenants out,” he said.

Bulwarks Against Displacement

Pumping subsidy and tax credits into rent-regulated buildings has long been a way to prevent low-income tenants from being priced out. And the de Blasio administration has proudly pointed out that it struck deals to preserve 5,500 rent-stabilized apartments over the past four years in Bronx Community Boards 4 and 5, which cover the neighborhoods affected by the rezoning. The city has also pledged to preserve an additional 1,500 units near Jerome in the next two years.

But Gibson said that she’ll push for the city to protect 2,500 or 3,000 units in the same period, because the neighborhood will be ripe for displacement and harassment. Bronx Borough President Ruben Diaz Jr. backed her up with a report released last week that identified 2,075 units within a quarter mile of the rezoning area that it considered a high priority for city preservation efforts. Properties on the list had high numbers of building violations, were already enrolled in some kind of subsidy or tax credit program and were in census tracts with larger families and lower incomes.

One of the best ways to prevent poorer Bronxites from being pushed out of the neighborhood could be the CONH program—if it works. The pilot program, set to launch at the end of August, will require some residential landlords to prove that they have not harassed current or prior renters in the past five years to secure permits for new construction, major alterations or demolition.

HPD has created a “building distress index” that will tell the New York City Department of Buildings (DOB) know which properties to flag when those owners seek permits. Buildings that have been sold recently, changed hands repeatedly over the last couple years, racked up a significant number of code violations or been issued a full vacate order would all make the list, as would ones where the landlords have been found guilty of harassment in the past. The list of properties would be public, so tenant advocates will know when those landlords apply for permits and be able to educate tenants in those buildings on their legal rights.

The program hinges on the HPD and the DOB sharing data and ensuring that the right properties get flagged when their owners apply for building permits. The agencies have nine months, beginning when the CONH law was passed last November, to set up those databases and notification systems. An HPD spokesman said the agency anticipates a smooth rollout of the program and expects to meet the fall 2018 deadline.

Councilman Brad Lander, who sponsored the legislation and organized the task force that drafted it, said, “We’ll be watching closely and exercising oversight. They [HPD and DOB] agreed to work with us on this task force process.”

But he does worry that tenants who are being harassed or have already been harassed out of a building will be afraid to talk to HPD about their experiences.

“I’m concerned that there are situations where harassment has occurred, but this system won’t detect it,” he explained. “In some cases where harassment took place, it will prove difficult or impossible for those tenants to make their case.”

Lander argued that his new citywide version of the certificate would discourage harassment while still allowing developers to build new housing and renovate older buildings. Still, CONH programs in neighborhoods like Hell’s Kitchen have created hurdles for landlords looking to renovate or sell.

“It definitely presents challenges for a landlord who’s looking to buy that kind of building and renovate it and re-let it,” said Treetop’s Mermelstein. “I think that will stymie some development in this area, and it discourage some investment.”

Goldstein, who also worked on the CONH legislation, said, “It has a lot of potential. It all rests on the idea that landlords are harassing their tenants because of how much money they can make in the future, and if we mess with that calculation, they’ll hopefully stop.”

Source: commercial

A Look at the Glassy Behemoths of Long Island City

So many skyscrapers are going up in Long Island City, Queens, that the air is starting to feel a little thin.

Much of the construction of the tallest buildings in the area is focused around the Queens Plaza and Court Square sections of the neighborhood with their easy access to eight subway lines.

primaryphoto41 A Look at the Glassy Behemoths of Long Island City
Court Square City View Tower. Rendering: CoStar Group.

LIC’s towers are not actually like the super skinny ones that dominate the skyline along West 57th Street, and most are not condos purchased to park money for shady foreign elites.

But we shouldn’t sell them too short, either; there is at least one tower that’s so tall that its developer filed its plans with the Federal Aviation Administration to make sure it wouldn’t pose a threat to airplanes. (That’s what happens when you want to build supertall skyscrapers a few neighborhoods over from two of the busiest airports in the country.)

That building, United Construction & Development’s Court Square City View Tower, as it’s currently known should stretch 66 stories and 984 feet high. It will be the tallest structure in Queens. The building, at 23-15 44th Drive, will feature roughly 800 condominium units. It is being designed by Hill West Architects and will feature a double-height lounge with a mezzanine area overlooking a pool on the third floor. The tower will also have two shades of glass—a neutral blue on its broader sides and a clear green

eagle hero A Look at the Glassy Behemoths of Long Island City
Eagle Lofts. Rendering: Rockrose Development

on the edges. (By the way, the FAA determined in September 2016 the building will not be a “hazard to air navigation.”)

Durst Organization has plans for a 63-story, 765-foot tall rental building that would be attached to the landmarked Clock Tower in LIC at 29-55 Northern

Boulevard. Durst is planning outdoor open space for the tower dubbed Queens Plaza Park and other amenities, although those have not been announced yet. The tower will have 958 apartments.

Stretching nearly 600 feet and 58 stories, Tower 28 at 42-12 28th Street by Heatherwood Communities is next up in terms of height of projects under construction or already completed. The project opened last year and features 451 apartments. It houses amenities such as a fitness center, spa, sauna and yoga studio.   

Then there’s Rockrose Development’s Eagle Lofts at 43-22 Queens Street at 570 feet and 54 stories. The SLCE-designed building under construction will have 790 units and feature 15,000 square feet of interior amenities for a fitness center, entertainment lounge, rooftop barbeque areas, yoga studio, media screening room, children’s playroom and library.

And under construction now is Tishman Speyer’s Jackson Park. It will include three high-rise rental towers, the tallest of which, at 28-34 Jackson Avenue, will be 53 stories and comprise roughly 650 apartments. The complex will have its own amenity building at 45,000 square feet. Those perks will include amenities like a swimming pool and fitness center.

Source: commercial

While Williamsburg Suffers L Train Problems, It’s LIC’s Time to Shine

Long Island City, Queens, has long been treated like Williamsburg, Brooklyn’s not-quite-ready-for-prime-time little brother.

Both waterfront communities are one stop from Manhattan and have seen great gusts of development since the beginning of the millennium, but Williamsburg has been the pricier, more desirable and cooler of the two. (Even though LIC had a much greater transportation network: eight subway lines, 15 buses and two ferry stations.)

Well, that’s likely to change when the L train takes a 15-month hiatus starting in April 2019 so the Metropolitan Transportation Authority can repair tunnels damaged by 2012’s Superstorm Sandy, real estate professionals say. (The L shutdown will interrupt 225,000 riders that ride the line between Manhattan and Brooklyn daily.)

“A bunch of residents that came to tour our building said ‘Williamsburg and Greenpoint is not for us—my commute can’t suffer [15 months] or longer,’ ” David Brause, the president of Brause Realty, which is completing a 38-story rental tower in LIC, told Commercial Observer.

fxcollaborative the forge photo by eduard hueber 02 While Williamsburg Suffers L Train Problems, It’s LIC’s Time to Shine
The Forge, Brause Realty’s 38-story rental in LIC. Photo: FXCollaborative

As Brause pointed out, “This is not an isolated story.”

Brause is among a fair number of developers and brokers that informed CO of the exodus from Williamsburg to LIC. David Maundrell, Citi Habitats’ executive vice president of new developments for Brooklyn and Queens, said that just this past weekend his office had five people from Williamsburg looking for rentals in LIC.

“It’s really just worrisome to a lot of people that there is no real solution but buses and Uber,” said Eric Benaim, the president, chief executive officer and founder of Long Island City-based Modern Spaces. “In four or five minutes you can be in Midtown Manhattan [from LIC]. And we have great parkland, and there are a lot of things to do here now.”

And he added, “There is obviously a buzz. I get all the time that ‘I’m hearing a lot of good things about Long Island City.’ ”

Another thing pushing residents to the Queens neighborhood: cheaper rents. The average rental unit in LIC was priced at $2,291 per month for a studio and $2,904 for a one-bedroom apartment, according to Modern Spaces’ fourth-quarter 2017 market report. Meanwhile, in Williamsburg it was $2,671 per month on average for a studio and $3,076 for a one-bedroom, according to Citi Habitats’ report for the same period.

And besides price and proximity to Manhattan, this isn’t your grandfather’s LIC—heck, it isn’t even your father’s LIC. There are more than 170,000 residents, 106,000 workers and 6,600 businesses in the neighborhood, according to the local economic development organization, the Long Island City Partnership.

Since 2006 more than 14,100 rental apartments and condominium units have been completed and there are another 19,100 in the planning stages or currently under construction. By 2020, the retail market is poised to more than double in size, adding 508,000 square feet to the current 325,000 square feet.

“Long Island City was once viewed as a location for convenience. Ten years ago you would move to Long Island City because you worked in [the] Grand Central [Terminal area], and you moved to Williamsburg because you wanted to live there,” said Stribling & Associates’ Patrick Smith, a resident of LIC and a residential agent that works in the area. “But what has happened over the course of the past 10 years is Long Island City is now perceived as a lifestyle neighborhood.”

Waterfront parks and good restaurants have sprouted up in the last few years in LIC, including Michelin-starred Casa Enrique and the highly respected Italian eatery Levante; art institutions like MoMA P.S. 1 and the Sculpture Center; two Food Cellar grocery stores and a Duane Reade; fitness facilities such as The Cliffs at LIC and Brooklyn Boulders; and schools, including the expanded P.S./I.S. 78Q and Cornell Tech on Roosevelt Island (which is technically a part of Manhattan, but it’s pretty much in LIC).

And some of the retailers are picking up on the Williamsburg-to-LIC shuffle. The Gutter, a bar and bowling alley that opened in Williamsburg in 2007, opened an outpost in LIC last year. And Sweet Chick, the popular chicken and waffles concept started on Williamsburg’s Bedford Avenue by John Seymour and rapper Nasir “Nas” Jones, announced in November 2017 plans to open an LIC eatery.

“LIC has some great restaurants and places to hang out,” said Helena Durst, a principal at Durst Organization. “It has a very cool vibe to it.”

Durst, in fact, is comfortable making a 765-foot tall bet in the neighborhood. The developer filed plans last July with the New York City Department of Buildings to erect a rental tower at 29-55 Northern Boulevard with 958 units—70 percent of which will be market-rate—and 15,000 square feet of retail. There will also be more than a half acre of open space.

Durst purchased the site in December 2016 from Property Markets Group and Hakim Organization for $175 million. The previous developers were planning a 66-story building at the site, which has a landmarked Clock Tower building with 53,000 square feet of commercial space. The developer is still planning out amenities in the building, but it banks on attracting professionals looking for value.

“We see the residential market continue to grow as people keep getting priced out of Manhattan,” Durst said.

Durst is hardly the only one who’s placing bets in LIC and as the skyscrapers keep rising, developers are trying to one-up each other with their amenity packages.

15 rooftoppool park completion 2 170313 While Williamsburg Suffers L Train Problems, It’s LIC’s Time to Shine
Jackson Park will have a rooftop pool and two-acre park. Rendering: Tishman Speyer

“Renters are looking for new products that are highly amenitized,” said Erik Rose, a managing director for residential development in the New York region for Tishman Speyer. “They’ll even move out of buildings that are two and three years old for the latest and greatest.”

Tishman Speyer is expected to complete construction of its 1,871-unit, three-building rental named Jackson Park in LIC at the end of this year. The tallest structure—at 28-34 Jackson Avenue—will rise 53 stories.

The complex surrounds a two-acre private park, complete with dog run, children’s play area, outdoor seating, Ping-Pong tables, barbecue pits and bocce courts (because bocce tournaments are a thing in LIC, Rose said). In addition, there will be a 45,000-square-foot, five-story building with lounges, fitness center, 75-foot pool, sauna and full basketball court.

Brause Realty and Gotham Organization have really turned it up at their 38-story LIC building at 44-28th Purves Street named The Forge. Leasing for the 272 units started in August 2017, and it’s already 50 percent leased. The building comes with 26,000 square feet of amenity space including an outdoor pool (pools, by the way, are commonplace at new luxury LIC rentals), movie screen, hammocks, fitness center, bike storage, residents’ lounge and rooftop lounge with views of the Manhattan skyline and art installations. The building is also feng shui-certified, and the developers are seeking a Leadership in Energy and Environmental Design Silver designation.

Nearby is G&M Realty’s two-building 1,151-rental-unit complex at 22-44 Jackson Avenue. The project includes a 48-story structure and 41-story tower, both at the former site of 5 Pointz, the once-great graffiti complex. Amenities will include bike storage, pet grooming and other pet services, a swimming pool, a game room, a laundry room, a fitness center and a courtyard.

And Rockrose Development Corp. is building a 54-story rental at the former Eagle Electric Factory at 43-22 Queens Street called Eagle Lofts with 790 units. Building highlights: roof decks and 15,000 square feet of interior amenity space for a fitness center, an entertainment lounge, rooftop barbecue areas, a yoga studio, a media screening room, a children’s playroom and a library. And all apartments will come with washers and dryers.

Last April, Rockrose opened a 51-story building with 974 apartments (195 affordable) in LIC at 43-25 Hunter Street called Hayden. It’s already 85 percent leased and has 18,000 square feet of amenities—5,360-square-foot fitness center, full-sized basketball court, billiard room, solarium, yoga studio, Zen garden, media room, children’s playroom, rooftop terraces and all the units have washers and dryers.

The competition for renters is so stiff that landlords are giving away rent to woo tenants.

“You can do a two-year lease with one to three months of free rent,” Smith said. “Some developers are paying brokers’ fees.”

But LIC will be more than just another outer-borough bedroom community. Large mixed-use projects with office and retail spaces are on the way to beef up the office market.

Tishman Speyer is building The Jacx, a 1.2-million-square-foot office and retail building at 28-10 Queens Plaza South, where WeWork has already signed on for 225,000 square feet and Bloomingdales inked a deal for 550,000-square-foot offices.

The Jacx will also include over 50,000 square feet of curated retail space, including a market, food hall, upscale dining, boutique fitness center, 175 bike spaces and an onsite valet garage for 550 vehicles, according to the project website.

Another mixed-use megaproject is the TF Cornerstone-led development in the 4.5-acre Anable Basin inlet section of LIC.

rendering licic While Williamsburg Suffers L Train Problems, It’s LIC’s Time to Shine
TF Cornerstone and its partners are development a mixed-use project in the Anable Basin section of LIC. Rendering: TF Cornerstone.

Alongside partners Greenpoint Manufacturing and Design Center, Coalition for Queens and BJH Advisors, TF Cornerstone was selected by the New York City Economic Development Corporation last July to build it. The two-tower development will feature 1,000 apartments, and one of the two towers will reach 650 feet.

In addition, it will house 400,000 square feet for offices and 100,000 square feet for light industrial use. The plans also call for an 80,000-square-foot public school, a 25,000-square-foot performing arts training facility and 19,000 square feet of retail.

“One of the primary goals of this project is to support the commercial, technology, artisan and industrial businesses of Long Island City, while also balancing that work environment with market and affordable housing,” Jake Elghanayan, a principal and senior vice president at TF Cornerstone, said in a statement when the project was announced. “By providing dedicated space for skilled job training programs, the project will generate a diverse set of economic and employment opportunities for New Yorkers.”   

Most of the Williamsburg folks looking to move to LIC are renters seeking short-term space—for 15 months—while the L train is shut down, according to Smith.

Home buying is a whole other subject. The L train shutdown won’t deter potential homebuyers from plunking down money in Williamsburg if they have the long game in mind, Smith said.

Part of the problem in LIC is a lack of inventory. Until now there was not much in the way of condos in the neighborhood, as most developers took advantage of 421a to build rentals with an affordable component. Nearly 2,800 of the 17,000 units planned in LIC between now and 2020 will be condos, according to Citi Habitats’ Maundrell.

But many condo projects have been announced recently, and Benaim is predicting a shift away from rentals soon.

“I think there is going to be a condo boom probably like by the third quarter of this year,” Benaim said. “We [will be marketing] buildings as small as 12 to 15 units and as large as 800 units.”

That 800-unit condo project at 23-15 44th Drive is called Court Square City View Tower. Developer Jiashu “Chris” Xu’s United Construction & Development Group is building the planned 66-story structure that is slated to rise 984 feet, making it the tallest structure in Queens.

Other LIC residential condo projects include Slate Property Group and Carlyle Group’s 88 unit building at 21-21 44th Drive and the 65-unit 5 Court Square by David Wu.

Condos are already achieving similar pricing to Williamsburg. The average condo in LIC sold for $1.1 million at $1,174 per square foot, according to data from Modern Spaces’ fourth-quarter 2017 report. In Williamsburg on the other hand it averaged $1.2 million at $1,264 per square foot, according to the Citi Habitats report.

“[LIC] has an extremely strong condo market, because there is really no supply and a lot of demand,” Maundrell said. “The demographic that is moving into Long Island City would like to buy but they can’t.”

With all of the new skyscrapers that will be popping up around LIC, one could mistake it for parts of Manhattan—just don’t call it Billionaires’ Row for non-billionaires.

“I wouldn’t call it Billionaires’ Row, because Billionaires’ Row has Central Park to look at,” Maundrell said. “And Billionaires’ Row doesn’t have rental buildings.”

It might not be West 57th Street in Manhattan, and it might not be Bedford Avenue in Williamsburg—but it is something exciting.

Source: commercial

City Planning Approves Zoning Change, Allows Construction of Sutton 58 Resi Tower

The City Planning Commission on Wednesday approved a revised rezoning proposal that aimed to cap the scale of Gamma Real Estate’s planned 800-foot-tall residential tower at 3 Sutton Place and limit the scope of future skyscraper development in the Sutton Place area.

Both proponents and opponents of the proposal—brought forth by the East River Fifties Alliance and certified by the CPC on October 2—scored small victories with the decision, ahead of it being advanced to the City Council for consideration.

Under the revised proposal’s stipulations, any new development in Community District 6—from east of First Avenue and north of East 51st Street—that’s allocated more than 25 percent of its total floor area to residential uses will have to follow “tower-on-a-base” requirements, which mandates that 45 to 50 percent of the building must be built below 150 feet. The initial rezoning proposal the ERFA introduced in June 2016 called for a 260-foot height restriction and the inclusion of a significant portion of the tower to affordable housing.

With the vote, Gamma President Jonathan Kalikow tallied a small triumph in what’s been a two-year-long battle over the acquisition and development of the site. The CPC voted to grandfather Kalikow’s project, adding a provision that exempts buildings currently undergoing development in the area. This allows his firm to proceed with construction on its planned 67-story tower dubbed Sutton 58—located at 430 East 58th Street between First Avenue and Sutton Place—while halting any future similar development in the area.

Still not satisfied, Kalikow, who’s been a staunch opponent of the by products of the proposal, saying it sets a bad precedent for future development across the city, said in a statement, “While we wish that the City Planning Commission had rejected the ERFA’s application outright, we appreciate that they have decided to grandfather our project, which will not only ensure that our as-of-right development can move forward, but also protect the jobs of the hundreds of workers who are relying on construction of our building to move forward.” Kalikow will move to complete the building’s foundation before the proposal reaches City Council so to safeguard the project from any possible amendment to stop its construction.

Councilman Ben Kallos, who represents the residents of Sutton Place and cosigned the ERFA’s proposal, told CO after the CPC’s vote that although he’s ultimately pleased with the result, there’s more to do.

“I’m grateful that this matter has been addressed by the CPC as this has been a years long process,” Kallos said. “We received public guidance from CPC and followed that guidance, putting forth tower-on-base provisions. I’m grateful they voted it out. We now must move as quickly as possible through the city council as there’s a race afoot.

“I do not believe the zoning area should be grandfathered [to allow Gamma’s development],” Kallos added. “I intend to recommend it be removed, and I hope to pass it out of the council without any grandfathering clause.”

Kalikow added: As this application now moves to the New York City Council for a vote, we call on our Council Members to also put aside the politics and influence of the handful of New Yorkers who are leading ERFA’s self-interested charge and consider these many more lives who are depending on our project. We hope that they will follow the CPC’s suit in allowing us to continue with our development.”

The ERFA argued in its proposal that the development restrictions “would more closely align future construction with the existing built environment, while still accommodating reasonable growth.”

ERFA President Alan Kersh called the CPC’s decision to grandfather the development “inappropriate,” adding in a statement that “the Commission should have approved the zoning change as it was presented and left any decision about grandfathering the Gamma project to the Board of Standards and Appeals.”

Real Estate Board of New York President John Banks told CO just before the CPC’s October 18 hearing of the proposal, “[This proposal] would provide an opportunity for people who have the means to mount a challenge to try this method of spot zoning going forward… it becomes a tool for people to use against any undesirable development. We’re concerned that there is no comprehensive planning that would take place if this becomes more of a norm.”

The ERFA’s proposal is backed by several community representatives, including Manhattan Borough President Gale Brewer and Kallos. New York State Senator Liz Krueger has cosigned the proposal, and recently, New York Congresswoman Carolyn Maloney signed on in support of the ERFA’s mission, having already written and voiced concerns to the CPC on the organization’s behalf, according to an ERFA spokeswoman.


Source: commercial

On the Waterfront: The Architecture Reshaping the Face of the East River

Last month, Douglaston Development threw a lavish grand-opening bash at Level, its new 40-story, 554-unit rental tower on North 6th Street on the Williamsburg waterfront. As they sipped drinks served by statuesque models in outfits bedecked with flowers, the couple hundred people in attendance enjoyed panoramic views of the Manhattan skyline from the building’s ninth-floor outdoor patio. Just to the south, towering over Level’s patio, stood the Edge and 1 North 4th—the other two Williamsburg residential towers that Douglaston has built and completed just steps from the East River.

With their gleaming glass facades rising hundreds of feet above the river, the Douglaston projects are an embodiment not only of Williamsburg’s transformation into a destination for high-end living, but of how New York City developers are more than ever recognizing the potential of building on the East River waterfront. From the redevelopment of South Street Seaport and the new projects lining Brooklyn Bridge Park near Dumbo, to the massive residential buildings rising in northern Brooklyn and Long Island City, real estate investors areto an unprecedented extentcapitalizing on the demand for apartments and offices near one of New York City’s main marine arteries.

Of course, this influx of real estate projects along the East River hasn’t happened overnight; it’s been years in the making with policy changes, like the major rezoning of Williamsburg and Greenpoint, in the last decade facilitating the transformation of those neighborhoods’ formerly industrial waterfronts.

But as developers are now springing at the chance to cash in on the rapidly evolving communities on both sides of the water, the East River has become a hotbed for architectural statements that, for better or worse, take many shapes and forms—whether it’s monolithic glass behemoths or metal-clad structures that play with angles and space in different ways.

“It’s hard to generalize about [the buildings], except to say that they’re all intended to take advantage of the riverfront,” said Paul Goldberger, the Pulitzer Prize-winning architecture critic and writer. “What we’re seeing is development that had begun in bits and pieces but is now happening more intensely. Now, it’s as if every last piece of the waterfront is seen as a potential high-end parcel.”

Goldberger noted that “there’s a huge variation in the architectural quality and the type of building” going up along the East River—a claim echoed by Justin Davidson, a fellow Pulitzer winner and architecture critic for New York magazine. “I wish, looking back, that New York had faced this issue with a more holistic sense of what kind of architecture it wanted to foster on the [East River] waterfront,” Davidson said.

What we have, instead, is a disparate and varied array of new projects that are reshaping the riverscape, and the city’s skyline, as we speak. While there are dozens of projects in the works and in various stages of planning or construction, here is a look at some of the more interesting buildings currently being built, in the order one would see them riding up the East River ferry from New York Harbor.

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Rendering of 1 Seaport in the Financial District. Image: Williams NY

1 Seaport at 161 Maiden Lane
Financial District, Manhattan
Developer: Fortis Property Group
Architect: Hill West Architects

At 161 Maiden Lane, Fortis Property Group is looking to capitalize on the Financial District’s emergence as a residential destination via 1 Seaport—not to be confused with the Jack Resnick & Sons-owned office building at 199 Water Street, which goes by One Seaport Plaza (the two sides settled a court dispute in 2015 over the “1 Seaport” moniker with Fortis agreeing to abandon the name after a designated marketing period).

The design by Hill West Architects deploys that most talked-about trend in New York City architecture over the past decade: the “skinny tower” popularized by the likes of 432 Park Avenue and One57. On completion, 1 Seaport is expected to stand 60 stories and 670 feet tall but will hold only 98 condo units; Jonathan Landau, Fortis’ chief executive officer, said that configuration was dictated in part by the lot’s narrow dimensions.

“There wasn’t really the option to make a wider building,” Landau said. But it was also a situation that “forced us to build a design that enabled us to capture all those great views,” he added—with Fortis and Hill West drawing up floor-to-ceiling “window walls” on the three sides of the tower facing out away from Manhattan.

In September, construction worker Juan Chonilla fell 29 stories to his death at the 1 Seaport site, leading the city’s Department of Buildings to halt work on the project. As of this writing, work at 161 Maiden Lane has ground to a standstill. The building’s concrete skeleton stands around 30 stories above the ground, and its glass facade has already begun to creep up the structure. It’s unclear, however, when work will resume.

“We’re hoping to still complete in time,” Landau said, citing the development’s “mid-2018” targeted completion date. “Unfortunately, there are tragedies like this on a site, and the Department of Buildings has to make sure all precautions are in place. But we’re certain we’ll be back up and running shortly.”

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Rendering of 10 Jay Street in Dumbo. Image: CoStar Group

10 Jay Street
Dumbo, Brooklyn
Developer: Triangle Assets, Glacier Global Partners
Architect: ODA New York

After flirting with a residential conversion of its historic 19th century warehouse, nestled just north of the Manhattan Bridge on the Dumbo waterfront, Triangle Assets and Glacier Global Partners looked to the underserved Brooklyn commercial office market in their repositioning of 10 Jay Street.

To helm the project, Triangle and Glacier tapped ODA New York, the Eran Chen-led architecture firm that is currently handling several projects along the East River (more on that later). “We found that ODA had a very unique vision for the building—a very outside-the-box type of architectural thinking,” said Benjamin Stavrach, Triangle’s director of leasing and property management. “We felt that, with the history of 10 Jay being so full of character, they were the proper architect for the project.”

Indeed, ODA harkened to the former industrial building’s history as a sugar refinery in designing the redeveloped eight-story, 230,000-square-foot structure’s most distinct feature: its glimmering, prism-like glass facade, which recalls the shape of crystallized sugar. That river-facing glass curtain wall and the preservation of features, like the original brick columns and the existing brick exterior on the building’s three other sides, were key factors in the project’s approval by the city’s Landmarks Preservation Commission.

“We’re very proud of this [project],” Chen said of 10 Jay Street. “It’s one of those examples where, in collaboration with [LPC], we agreed that the historical narrative of the building has as much importance as the brick and mortar. It would be a building that would clearly separate between what’s historic and what’s the new addition and tell a story about what was there before.”

Despite some construction setbacks caused by dilapidated brick, the building’s envelope is expected to be 100 percent complete by January with a temporary certificate of occupancy targeted for early spring. Stavrach noted that the building is already 35 percent leased (to companies like advertising agency Translation and software firm Nuxeo) despite having yet to hit the market—with tenants almost certainly drawn to 10 Jay Street’s floor-to-ceiling views of the Lower Manhattan skyline, Manhattan Bridge and East River.

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Rendering of One Manhattan Square on the Lower East Side. Image: Extell

One Manhattan Square
Lower East Side, Manhattan
Developer: Extell Development Company
Architect: Adamson Associates Architects

Looming over the Manhattan Bridge, in the Lower East Side enclave known as Two Bridges, stands Extell Development Company’s One Manhattan Square—the city’s largest new residential condominium development, featuring 815 for-sale units. The 80-story, 800-foot-tall building, which topped out in September, now dwarfs the century-old steel suspension bridge—a fact that does not sit well with many architecturally-minded observers.

Goldberger described the Adamson Associates Architects-designed structure as “a gargantuan, shiny glass tower that is not that different from a lot of what’s gone up in Long Island City and the West Side of Manhattan.”

Davidson, meanwhile, pointed to the “shock” of a building that makes one of the city’s “great monumental pieces of infrastructure look puny in comparison.” He described Extell’s decision to “put up a big hunk of glass” along the river in a remote part of the Lower East Side as “incredibly wasteful.”

But for the Gary Barnett-led development firm, the motivation seems clear. “Gary and Extell are always seeking opportunities to bring value to buyers,” said Raizy Haas, Extell’s senior vice president of development. “There’s very little supply and a lot of demand for waterfront properties.”

Haas offered a defense of both the project and its architecture, noting that “the initial concept was to embrace what we have, which is the water, the sky and the views.” She pointed to 45,000 square feet of outdoor gardens, designed by landscape architecture firm West 8, which wrap up to the building’s fifth floor, as well as the “earthy tone” of the materials used for the project’s podium and the dual, copper-and-silver-toned glass incorporated on alternating sides of the facade.

The building also deploys a “Z-shape” situated at an angle, designed to maximize sightlines and natural light for the tower’s future residents, as well as allow more corner units. “There’s no apartment with bad views,” Haas said. “They all have great views; the question is how great.” Residents will likely begin enjoying those views by the fourth quarter of 2018, when Extell expects move-ins to start, Haas said.

“I think the best thing you can say about it,” Goldberger said of One Manhattan Square, “is that it will be nicer to be in it, looking out.”

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Rendering of 420 Kent Avenue in Williamsburg. Image: ODA

420 Kent Avenue
Williamsburg, Brooklyn
Developer: Spitzer Enterprises
Architect: ODA New York

When Eran Chen and his architecture firm, ODA New York, were handed the responsibility of designing Spitzer Enterprises’ sprawling, three-towered, 857-unit residential complex just south of the Williamsburg Bridge, Chen knew that he wanted to do something different with the assignment.

“When Eliot [Spitzer, the head of the company,] and I met, it was clear that there is something about the building along the front of the East River that is very generic right now,” Chen told Commercial Observer earlier this year. “But the potential of living right on the East River and the openness of the views that you get are insane.”

The solution, as Chen elaborated to CO more recently, was an example of “how real estate value formulas can translate into a beautiful, fresh, new aesthetic.” Rather than simply laying out the buildings in a standard floor plan featuring only four corner apartments per floor, “We asked ourselves, ‘Can we create a tower where every apartment is a corner unit?’ ” Chen recalled. “The answer was yes.”

The shifting, block-like shapes that are 420 Kent Avenue’s defining feature are already taking form at the development site, which Chen said is moving along “exactly as planned.” The northernmost tower’s superstructure was completed several months ago and is already wrapped in its glimmering, glass curtain wall with completion slated for  the late spring or early summer of next year. The other two towers, bound by a shared podium structure, are following suit and should be done by early 2019.

As well as bringing added real estate value to the project—as Chen noted, corner units command higher rents—the design allows 420 Kent to “break the mold of the box shape” that has characterized many of the projects along the East River to date, Chen said.

“ODA really understands New York,” Davidson said of Chen’s firm. “They take all of these zoning constraints that make a lot of other architects throw their hands up and do whatever the constraints allow and really try to figure out what the zoning is looking to achieve and work within that. I think if everybody took that approach, we’d have a much nicer city.”

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Rendering of 325 Kent Avenue in Williamsburg. Image: SHoP

325 Kent Avenue
Williamsburg, Brooklyn
Developer: Two Trees Management
Architect: SHoP Architects

After years of planning, Two Trees Management’s massively ambitious redevelopment of the former Domino Sugar Refinery is finally taking shape—most notably through 325 Kent Avenue, the 16-story rental building comprising the first piece of the developer’s plans for a sprawling mixed-use complex just north of the Williamsburg Bridge.

The 505-unit property is the smallest building on the site, according to Two Trees Managing Director David Lombino, which gives one an idea of how big, exactly, the Domino Sugar redevelopment will be. Yet it is the SHoP Architects-helmed design, which features a prominent aperture (i.e., enormous hole) in the river-facing facade and clads the building in copper and zinc, which is the most impressive indicator of where Two Trees intends to go with the project at large.

Lombino said that Two Trees charged SHoP with a mission to reject the type of “very mundane, glass residential buildings topping out at 40 stories” along the waterfront—“buildings that had very little to do with the neighborhoods they were in and had their backs to them, in many cases.”

By design, Kent Avenue is “built to the same scale” as the landmarked brick refinery building next to it. Moving away from the waterfront, the building “slopes down to the neighborhood as an attempt to meet scale”—going from 16 stories to five by the time it reaches Wythe Avenue.  

As for that aperture, “it lets light and air pass between the waterfront and the neighborhood behind it,” Lombino said. “You can see Manhattan from Wythe Avenue and from Berry Street and Bedford Avenue” further inland. It also functions as “a clever way to bring natural light to our tenants” and is an architectural flourish that Two Trees is using at all of the new buildings on the site, Lombino added. “That was a statement about the wall of glass development that’s happening [in Brooklyn] and our desire to treat both sides of the river with equal respect.”

The building is nearing completion and has already started leasing on a rolling basis with part of the property opening this past summer and all construction slated for completion by the end of this year. Meanwhile, Two Trees is already pouring the foundation at 260 Kent Avenue—the 40-story, COOKFOX-designed mixed-use tower that will be the next piece of the Domino Sugar puzzle.

“I think this is an example of an area where the developer is thinking about all of the pieces as they relate to the whole,” said Davidson, who noted that Two Trees has worked extensively with the Department of City Planning and the LPC in designing the project and getting it approved. “There is some civic and urban thinking going into this project, which makes it different from most others.”

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Rendering of The Greenpoint at 21 India Street in Brooklyn. Image: Neoscape

The Greenpoint
Greenpoint, Brooklyn
Developer: Mack Real Estate Group, Palin Enterprises, Urban Development Partners
Architect: Ismael Leyva Architects

Greenpoint is witnessing its fair share of transformation these days, but nothing compares to the 39-story, 605-unit residential tower at 21 India Street that bears the neighborhood’s name. The 400-foot-tall structure, currently being built just steps from the banks of the East River, promises to change the game entirely.

Mack Real Estate Group came into the project “a little late,” according to Richard Mack, the company’s co-founder and CEO. He recalled how original plans by Palin Enterprises and Ismael Leyva Architects—while “very beautiful as conceived”—didn’t address market trends that have seen increased demand for “smaller rentals and larger condos.” So Mack and his director of development, Gary Davis, redesigned the 95 condo units at the top of the tower to be larger, while scaling down the rentals at the tower’s base. “We thought it would be more economical for renters and more spacious for buyers,” Mack said.

While most would be hard-pressed to argue that The Greenpoint fits within the existing context of the neighborhood given its sheer scale and imposing glass facade, Mack and Davis both contend that they tried to make the building “more contextual” by paying homage to the area’s industrial past. So they altered the color of the glass and introduced brick and steel elements—“Like you would see in a Tribeca or Soho warehouse,” Mack said—to the building’s podium.

“We said, ‘Let’s make it feel industrial and give you the sense that you are in an industrial building,’ ” Mack added.

Davis noted that “there are going to be lots of towers along the [Greenpoint] waterfront in the coming years,” and given the plans currently being drawn up by developers for nearby parcels—as well as the 10-building Greenpoint Landing residential complex also under construction up the street—it appears that the area’s waterfront is slated to experience a building boom similar to Williamsburg’s just south.

“It is a harbinger of other things to come,” said Goldberger. “We’re basically using every piece of waterfront we can find.” He noted that, while many builders attempt to tip their cap to the neighborhoods they are transforming, oftentimes such efforts merely paper over sizable changes to the aesthetic fabric of the community.

“I think it does what a lot of buildings have done, which is make a few minor gestures to the neighborhood that are maybe even disingenuous,” Goldberger said of The Greenpoint. “They’re trying to have it both ways.”

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The American Copper Buildings in Murray Hill. Photo: SHoP

American Copper Buildings
Murray Hill, Manhattan
Developer: JDS Development Group
Architect: SHoP Architects

With projects like 111 West 57th Street on Billionaires’ Row in Midtown and 9 DeKalb Avenue in Downtown Brooklyn currently in the works, JDS Development Group has justifiably earned a reputation for pursuing the kind of supertall, luxury residential developments that make a point of redrawing the New York City skyline.

But for the American Copper Buildings at 626 First Avenue between East 35th and East 36th Streets in Manhattan, JDS head Michael Stern had to take a different approach—thanks to zoning requirements that included a height limit and a mandate that, whatever JDS built there, it would have to touch the ground at specific locations on the site.

“We challenged SHoP [the project’s architect] to come up with something that would be architecturally dynamic but not upset the applecart of the existing zoning,” Stern explained. “With the height limit, there was no way to fit the floor area in one tower. It would have been more efficient to build one tower, but we’re very happy with where we ended up.”

The Murray Hill project winded up taking the form of two copper-clad, angular towers standing 41 and 48 stories each, one set back further from the river than the other, and both bound by a 100-foot-long sky bridge connecting the 27th through 29th floors. The copper exterior that lends the towers their name was proposed by SHoP. “It’s not cheap, but they did a great job engineering and procuring it,” Stern said. “It came out really spectacular.”

Today, the American Copper Buildings are virtually complete with finer touches set for completion by the end of the year. About half of the buildings’ 760 rental units are leased and occupied, Stern said.

“I appreciate that they’re high-rise buildings that are not exclusively glass,” Davidson said. “They’re using a material that has a long New York history and that will change as it ages. Materials like stone, brick, terra cotta and copper, when they’re cladding high-rise buildings, respond to time.”

Goldberger also praised the architecture and described the towers as “quite elegant,” albeit “a little bit of a gimmick.” He noted, however, that “on some level the top of the Chrysler Building is a gimmick as well—but it’s also brought us joy and pleasure for 90 years.”

“There’s nothing wrong with architecture that has the ability to catch your eye as you’re going past it,” Goldberger added. “I do find, whenever I pass it on the FDR Drive, that it holds my attention. Part of good architecture is providing a certain amount of visual entertainment.”


Source: commercial

Armory Conflict: Is the Mayor Willing to Kill a Development Over Subsidies?

Controversy over the Bedford Union Armory has roiled the working class, largely West Indian and African American community of Crown Heights, Brooklyn for the past three years. It’s a classic gentrification tale: public land, a historic building, developers wracked by scandal, a historically black community overwhelmed by tenant harassment, rising rents, thousands of new white arrivals and a city government intent on keeping its ambitious affordable housing plan on track.

Developer BFC Partners has filed plans to redevelop the armory, which occupies much of the block between Bedford Avenue, Rogers Avenue, Union Street and President Street, into a mix of rentals, condominiums, office space for nonprofits and a recreational center. If the City Council approves the plan (and last week it sailed through a City Planning Commission vote by 11 to 1), the housing portion will include 330 rentals, half of which would rent for below-market rates, and 60 condos, 12 of which would set aside for low- and middle-income households. Thirty percent of the rentals would be “permanently affordable,” as required by the city’s Mandatory Inclusionary Housing policy, which  demands that developers building on rezoned land reserve at least a quarter of their units as affordable. The rest of the apartments, 165 rentals and 48 condos, would be market rate.

In some ways, the project is a referendum on Mayor Bill de Blasio’s housing plan, which recently expanded to a goal of building and preserving 300,000 homes by 2026 (up from an original target of 200,000 units by 2024). It highlights the drawbacks of leaning on for-profit developers to produce affordable housing, particularly in communities of color that have grown to view large real estate companies as agents of gentrification and displacement.

Local activists have railed against the housing part of the armory development plan. While the proposal calls for 165 below-market rentals, only 67 of those apartments, or 20 percent, would be affordable to a typical family in Crown Heights. With the median household income in the neighborhood hovering around $41,425, the city would have to kick in a lot more money for the entire development to rent at rates that locals could afford. And the mayor’s office has refused to subsidize the armory’s housing, despite nearly two years of emotionally charged public meetings and protests.

Housing organizers charge that the city’s deal with BFC is a “gentrification plan.” It will bring housing that, by and large, only newcomers can afford. (A BFC spokesman said the company declined to comment. But the developer has said before that it is building as much affordable housing as it can without city subsidy.)

“On public land, we should ensure that we are building 100 percent affordable,” said Jonathan Westin, the director of activist group New York Communities for Change (NYCC). “The city and the administration are following a different philosophy, one that’s more of a gentrification plan, that hands over luxury housing units to developers like BFC.”

Emily Goldstein, a campaign organizer at the Association for Neighborhood Housing and Development, argued that building mostly middle-income housing on a large, publicly owned site would be a “missed opportunity.”

“There’s only so much public land in the city,” she said. “And public land creates opportunity to try creative solutions, to do deep affordability that a private developer may not want to try. [The city] can only do so much cajoling [with private owners]. They have control over public land. Then why not do the things that are hardest to do?”

Local activists have also lobbied for the city to transfer the land into a community land trust, a move that would help maintain long-term affordability through legal restrictions and ensure that a group of local stakeholders control the property. Ideally, the property would be developed and operated by a nonprofit developer, Goldstein said.

bedford president armory jeh Armory Conflict: Is the Mayor Willing to Kill a Development Over Subsidies?
The Bedford Union Armory at 1555 Bedford Avenue. Photo: Wikimedia Commons

A city spokesman shot back that affordable housing groups shouldn’t keep trying to shut down mixed-income projects in favor of an entirely subsidized generation of housing. The mayor’s original housing plan has budgeted for roughly 12,000 new units of affordable housing—out of a projected 80,000 total—to be created through the Mandatory Inclusionary Housing policy. (The mayor’s office didn’t provide estimates for the number of inclusionary units expected under the expanded 300,000-unit plan, which expects to produce 40,000 additional new construction apartments by 2026.) The city considers inclusionary units “free” because it does not subsidize them, but those developers often seek other kinds of state and federal tax incentives, as well as city ones like 421a (since named Affordable New York Housing Program).

However, the rest of the armory plan will bring benefits that southern Crown Heights has long craved. The armory’s soaring, arched drill hall will become a 68,000-square-foot public recreation center with a pool, basketball courts, turf fields and community space for meetings. The head house along Bedford Avenue, which was once classrooms, offices and a firing range, will be renovated into 40,700 square feet of office space for nonprofits and community groups. BFC plans to preserve the historic brick exterior of the head house, while demolishing the former stables on President Street to make way for new condos.

The armory has also sparked heated electoral debates. Councilwoman Laurie Cumbo, who has represented the area since 2014, has been pushing for city funding to make the whole project affordable to families earning 50 or 60 percent of the city’s Area Median Income, which works out to $48,960 for a family of three. Although she officially came out against the development in May, she waited a year and a half to take a strong position on the armory, leaving her vulnerable to criticism that she supported it. Cumbo recently defeated a tough primary challenger named Ede Fox, who built much of her campaign around accusing Cumbo of “flip-flopping” on the armory.

Ultimately, Cumbo will cast the deciding vote on whether the redevelopment of the armory lives or dies. BFC is seeking a rezoning in order to build a 13-story residential tower next to the armory, and Cumbo has the power to kill the project when it reaches the City Council for a vote in the last step of the public review process. The councilwoman wasn’t available to comment, but her spokeswoman said she still opposes the project and intends to vote it down.

In his formal recommendation issued in September, Brooklyn Borough President Eric Adams came out in favor of scrapping the condos and building 100 percent affordable housing on the site. He pushed for replacing the market-rate condos and rentals with high-income affordable units, which would likely go to families earning between $85,900 and $141,735 (100 to 165 percent AMI, based on a three-person household). The condos were supposed to pay for a third of the $31 million construction cost for the recreation center, and the market-rate rentals were expected to fund a portion of the facility’s operating costs. Slashing those units would create a significant funding gap, which could be closed by getting rid of the pool, the sports center’s most expensive piece, according to Adams. He also recommended setting aside 20 percent of the rentals to house the homeless, a move that could be funded by the city’s new Our Space program.

The Art Nouveau armory at 1555 Bedford Avenue was originally built in 1903 for the Troop C Cavalry unit, a National Guard outfit organized in 1895 to fight in the Spanish-American War. The National Guard used the building as a drill hall for decades, but in recent years, the property has been rented out mostly for film shoots and Hasidic weddings. The military left the facility in 2011, and the city took control of it in 2013.

Later that year, the New York City Economic Development Corporation issued a request for proposals for the 138,000-square-foot structure. The RFP didn’t mention housing at all. But it did require a project that will serve the community, generate cash flow for at least the next decade and preserve the character of the existing building.

A handful of developers submitted proposals, including Triangle Equities, Steiner NYC, RBH Group and a partnership between Jonathan Rose Companies and Poko Partners, according to documents obtained through a Freedom of Information Law request. All of the bids included housing and community space. But each team came armed with its own ideas for retail and commercial portions of the complex. Steiner pitched a Brooklyn outpost for the artsy, Berlin-based Michelberger Hotel with a performing arts space and greenhouse. RBH proposed a WeWork, an aeroponic (soilless) farm and an Eataly, as well as public gardens and a farmer’s market. Triangle floated a grocery store, a New York Sports Club and an Alamo Drafthouse Cinema.

However, the winning plan came from BFC Partners, Slate Property Group and then-Knicks player Carmelo Anthony’s Melo Enterprises. In March 2014, as part of the RFP process, BFC sent a letter to EDC outlining the future ownership structure of the armory development. BFC would own 50 percent of the complex, Slate would control 40.1 percent, and Melo Enterprises would own 9.9 percent.

In June 2015, the developers signed a contract, known in development-speak as a term sheet, with EDC. They agreed not to take any city subsidies or financing for the housing portion of the project, except in the form of tax-exempt bonds. The only municipal cash mentioned in the early documents released by EDC is $1 million dollars set aside from the Brooklyn borough president’s office, an amount originally earmarked for the armory by Marty Markowitz when he held the post. But to fund the construction of the recreation center, the developers intend to apply for roughly $6.5 million in state funding and $3 million in city discretionary funding, according to a financial document from BFC dated September 2016.

Without additional money from the city, BFC can only build 50 percent affordable housing. The market-rate rentals and condos are necessary to subsidize the below-market rentals and the recreation center, BFC’s John Valladares argued at a public meeting in February. Financial documents back that up: The condos, for example, are expected to net nearly $42 million. But after $38 million in development costs and $2.5 million in broker’s fees are subtracted from the equation, only $737,000 is left. Similarly, the rental building will generate roughly $8.2 million annually, but once operating costs, real estate taxes and debt service are subtracted, it will generate roughly $800,000 a year.

And now, BFC has less capital to draw on than when it first won the contract for the armory. Both of its original development partners dropped out of the project last year. In the spring of 2016, Slate got caught up in a scandal involving Rivington House, a Lower East Side nursing home it acquired just as the previous owner convinced the city to lift a deed restriction on the property. After de Blasio announced that he would take a “very hard look” at Slate’s involvement in the armory, the developer backed out of the project in August 2016.

At the same time, community activists sharply criticized Anthony for his financial stake in the armory in an open letter published by the New York Daily News. “This development is not good for Crown Heights, and it’s not good for Brooklyn,” wrote Bertha Lewis, the head of the Black Institute. “Your name should not be associated with such a terrible deal for New Yorkers…As it stands, the Bedford Armory development will further exacerbate the gentrification of Crown Heights.”

Anthony, who had planned to help fund the recreation center, jumped ship in September 2016. This March, BFC replaced its former equity partners by bringing in a nonprofit developer, the Local Community Development Corporation of Crown Heights.

Given that the project doesn’t have a large financial cushion, real estate experts said that the city cannot ask the developers to pour more money into construction or operations.

“When you want to do an affordable housing project with a [for-profit] developer, you have to see what the developer can stand,” said Stewart Sterk, the director of the Center for Real Estate Law & Policy at the Cardozo School of Law. “If you ask for too much, the developer can always do other things with its money. And if it won’t get a return on its investment, it will go elsewhere. The city is never in a good position to evaluate the developer’s risk in the project. The city knows that if it asks too much of a developer, the project will fold.”

Nevertheless, community groups continue to pressure the administration and city politicians into subsidizing the armory. Last week, protesters from New York Communities for Change and the Crown Heights Tenant Union pushed their way into a City Planning meeting about the armory plan.

As the City Planning Commission green-lighted the proposal, neighborhood City Council candidate Jabari Brisport and Joel Feingold, a founding member of the tenant union, were arrested and hauled away in handcuffs. Brisport and NYCC hosted another protest a few days later where they blocked Broadway in front of City Hall, demanding that Laurie Cumbo “Kill the deal, not tweak the deal.”


Source: commercial