[The long-stalled 644 E. 14th St.]
Back in December, Mayor de Blasio announced that the New York City Housing Authority would sell its unused air rights to developers for the first time ever as part of plan called NYCHA 2.0.
The cash-strapped NYCHA said that it would transfer a portion of its 80-million square feet of air rights to generate $1 billion in capital repairs for nearby developments.
PincusCo examined city records to find that several developers have spent hundreds of thousands of dollars to lobby the city for these air rights.
Many familiar names are on the list. According to the PincusCo investigation, Madison Realty Capital hired one of the city’s most active government lobbying firms, Capalino+Company, to approach NYCHA about the air rights at Campos Plaza II adjacent to the long-stalled development at 644 E. 14th St. at Avenue C.
Per PincusCo:
Madison Realty is not the fee owner, but the lender on the project. The property owner, Shulamit and Shaya Prager’s Opal Realty, purchased 644 East 14th Street for $23 million in 2016, from the Rabsky Group. At the same time, Opal borrowed $52 million from Madison Realty Capital.
How the firm will obtain air rights from NYCHA for its site is not clear, however, because the adjacent NYCHA development, Campos Plaza II, has no available residential air rights, according to a PincusCo Media analysis of city land use records.
That said, Madison Realty almost certainly has a legitimate strategy to obtain air rights. The firm may be seeking an upzoning on the NYCHA parcel, which would make air rights available.
Or alternately, the developers may be seeking a lot merger with two other tax lots co-owned by NYCHA that have more than 300,000 square feet of community facility space available. That would allow the developers to build, for example, a college dormitory space for students. Scores of New York University students live in apartments across the street at Stuyvesant Town. Madison Realty did not respond to a request for comment.
As previously reported (see the links at the bottom of this post), the pre-air-rights plans called for a 15-story residential building with space for a health-care facility.
[The most recent rendering of the development]
There hasn't been much, if any, activity at this southwest corner of 14th Street and Avenue C in 15-plus months. According to city records, the new building permits expired in December. As the PincusCo report notes, this stall may be intentional. "With additional air rights, the project could presumably be larger."
Also, in late January, the Commercial Observer reported that Second Avenue Deli owner Jeremy Lebewohl filed a $10 million lawsuit alleging that his five-story residential building at 642 E. 14th St. sustained damages by the foundation work next door at No. 644.
As for the currently stalled new development, here's a rehash of the info I received on the project in September 2016:
Madison Realty Capital (MRC), an institutionally-backed real estate investment firm focused on real estate equity and debt investments in the middle markets, provided a $52.0 million first mortgage loan for the acquisition of a development site in the East Village and construction of an approved 76,259 square foot mixed use development on the site.
The plans for 644 East 14th Street include 50 residential units, 8,064 square feet of retail space with 200 feet of frontage on 14th Street and Avenue C, and 21,575 square feet of community facility space.
The property is located at the corner of 14th Street and Avenue C, along the Northern border of the East Village and directly across the street from Stuyvesant Town. Residential units will offer contemporary finishes and large balconies with East River views. The borrower is currently finalizing a lease with a major New York hospital to occupy the entire community facility portion of the new building.
This corner property previously housed the single-level R&S Strauss auto parts store, which closed in April 2009.
In 2015, Madison Realty loaned $124 million to Rafael Toledano, a then 25 year old with no track record as a landlord so that he could buy a portfolio of 15 buildings, mostly in the East Village. He eventually defaulted on Madison's loan.
Previously on EV Grieve:
Development back in play for East 14th Street and Avenue C
More details on the sale of 644 E. 14th St.
Here comes a 15-story retail-residential complex for East 14th Street and Avenue C
Prepping the former R&S Strauss auto parts store for demolition on East 14th Street and Avenue C
City OKs 15-story mixed-use retail-residential building on 14th and C
14th and C now waiting for the Karl Fischer-designed 15-story retail-residential complex
14th and C still waiting for its Karl Fischer-designed retail-residential complex
Report: New owners for the empty lot at 14th Street and Avenue C
6 comments:
I see this plan of upscale development on NYCHA properties as having a hugely negative impact on residents in the existing housing. I see this as a win for developers, not NYCHA residents.
That billion dollars will be used up in good time and then the city will look to sell more of our assets to developers until all public land Is private. The mayor, state and Feds have given up on housing for low income people by eliminating funding and will soon eliminate low-income housing in general. The greed is never-ending and now official government policy.
In the meantime, check out the millions that the City and State are giving to new luxury park development - including Hudson Yards - that will benefit luxury real estate interests and affluent residents.
Money that is really needed by NYCHA, the MTA or decrepit parks in the boroughs/non-affluent neighborhoods.
Taxing, spending and borrowing are on a near fatal collusion course. The city and state are looking for new sources of revenue to keep up with spending. Selling off assets and taxing the new buildings is one way. Attracting the rich is another. That's why there won't be a wealth tax. Even desperate Bill has stopped prattling about one of his big "progressive" demands. Why? because he can't stop spending . His wife just threw away 600 mill on a mental health program that she couldn't even explain. And she's not in jail?! So it's easy to see why Mayor Bill has turned over the city to developers to pay for his MESS. ONE PARTY RULE. ONE PARTY RULE.
This is all so wrong. Development in the East Village (or anywhere in NYC, really) should not be a "beginner's game" a la Toledano, where the newbie with attitude (and not much else) gets to destabilize entire buildings, blocks, and even neighborhoods as they play out their "amateur hour" king-of-the-hill fantasies.
The Federal government is now over seeing most of NYCHA stopping just short of complete take over of a failed Municipal Authority like Chicago and St Louis. It is estimated that the 325 Developments require 32 Billion dollars in capital spending to bring them to a good state of repair. This sum represents the budget for NYPD for five years. The answer lies in what is sustainable and how best to take assets that are now liabilities and create working capital to invest in Developments that are capable of being renovated. The federal and state government will not put large sums in. The city under court mandate has committed Billions not previously budgeted. The city has many infrastructure needs requiring capital expenditure. There is no one solution here but private development should not be dismissed as well as reorganization and down sizing of NYCHA. Time is not a friend in twenty years all the developments can be lost and the city reverts to the time before the 1930's of tenement slums.
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