[
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