July 2012 » Market Analysis » NY New Developments

July 2012 New York New Developments

Major Developments

While details are sparse, Bowery Boogie is well underway on the 65,000-square-foot building, which has been covered in scaffolding for weeks. The renovation is being carried out by Lower East Side architecture firm Studio Castellano.

The city’s Economic Development Corporation wants proposals from developers who would like to build and maintain underutilized industrial plots in three New York City boroughs. These include 95,000 square feet at 2399 Watson Avenue in the Bronx’s Zerega section, 80,000 square feet in East New York, Brooklyn, 53,000 square feet in Sunset Park, Brooklyn and 40,000 square feet in Queens’ College Point Corporate Park at 28th Avenue and 122nd Street. Each site is eligible for sale or lease.

A plan to boost tourism on Staten Island could result in the world’s largest Ferris Wheel next to the Staten Island Ferry Terminal. The New York City Economic Development Corp. is currently in negotiations with developer Plaza Capital Group Management to build the 600-foot “observation wheel” it proposed last year. The EDC had put out a request for expressions of interest for multiple projects meant to develop 14 acres of city-owned waterfront property in the borough.

The Kingsbridge Armory isn’t the only former military facility that could become a skate haven. One of the proposals being considered for the vacant Bedford-Union Armory in Crown Heights is to convert it into a roller skating rink.

The concept emerged from a report conducted by NYU graduate students for Brooklyn Borough President Marty Markowitz. The state National Guard is transferring ownership of the Bedford-Union Armory to the city and Markowitz has pledged a total of $1 million in funding for its redevelopment.

The New York Giants and the New York Jets are trying to tackle a Meadowlands mall development just as it appears to be destined for the endzone. The two teams filed a lawsuit to block the American Dream Meadowlands mall in New Jersey. The suit focuses on an alleged violation of a prior agreement that the two teams, who play at the nearby MetLife Stadium, had secured the rights to approve any expansion plans for the shopping center.

The controversial East 91st Street waste transfer station, which is expected to cost the city $554 million over 20 years, is facing yet another obstacle. A group led by State Assemblyman Micah Kellner filed suit against Mayor Michael Bloomberg, the city Department of Sanitation and the state Department of Environmental Conservation.

Advertising giant Deutsch is to renew its lease for 100,000 square feet at 111 Eighth Avenue. This further derails Google’s plans to expand in the 3 million square-foot building it bought at the end 2010 for a record $1.8 billion. Google had been in talks to pay the ad firm, owned by Interpublic Group, to choose not to exercise its option to renew. Deutsch had considered inking a lease at 11 Madison Avenue.

First Kent Swig was dealt with financial difficulties at his developments, then with a divorce and a suit from father-in-law Harry Macklowe, and now it appears he’s getting hammered by his home loan, too. It seems that Bank of America is suing Swig, his wife Elizabeth (Macklowe’s daughter) and the co-op at the address to recoup payments on loans tied to his duplex apartment with principals of $4.8 million and $12.8 million that have not been paid since 2009.

Designed partly to show America’s resiliency after the 9/11 attacks, the ground zero memorial is also helping Lower Manhattan’s museums and cultural institutions bounce back. A record 9.8 million people visited museums, events and attractions in the area in 2011, an 8 percent annual increase. A million of those visitors came to the 9/11 Memorial in its three and a half months, and 3 million people from 150 countries have visited it since its debut.

CPG, which handles investments for employees and clergy of the Episcopal Church, plans to sublease its existing offices at 437 and 445 Fifth Avenue upon moving into the Madison Avenue property.

The Rent Guidelines Board voted on the lowest rent increases for the city’s 1 million-plus stabilized rent units since 2002. Landlords claimed the increase, totaling 2 percent for one-year leases and 4 percent for two-year leases, wouldn’t cover rising costs and property taxes. But tenants advocates argued that any increase was unaffordable considering the current economic climate.

Ambitious proposals keep on coming for the Kingsbridge Armory. A group of developers and educators submitted a proposal to the city for the world’s largest ice sports center. The proposal, headed by a Deutsche Bank executive, features nine indoor rinks and includes the possible acquisition of land north of the armory for an ice sports-themed public school. It’s backed by the Urban Assembly education franchise, New York Rangers legend Mark Messier and Olympic skater Sarah Hughes.

The Department of City Planning will launch a new initiative July 2 to speed the pre-certification process for projects that require land use review. Called Business Process Reform, or BluePRint, the new program will allow City Planning to review applications up to 50 percent faster than it does today, expediting applicants’ progress prior to the formal public review stage, known as Uniform Land Use Review Process, which takes a maximum of seven months.

An amendment to Hudson River Park Act that would allow for hotel and residential development on Pier 40 is unlikely to pass. With the state legislative session set to end tomorrow, there doesn’t appear to be anywhere near enough support for a bill that would allow development on the financially troubled pier.

After two year of budget deficits, the park’s money reserves are drying up. It is on pace to run through all of its funds in less than three years, which would force the park’s closure.

Recent press speculations and predictions have been confirmed: Mayor Michael Bloomberg’s office announced the selection of Toll Brothers and Starwood Capital Group to develop a 550,000-square-foot complex at Pier 1 in Brooklyn Bridge Park, which will include a 200-room luxury hotel and 159 residential units. The hotel and residential complex will rise 10 stories, and there will be a separate five-story residential building.

The private developers who closed on the former Taystee Bakery Complex in west Harlem plan to break ground by next summer on a large commercial and industrial space that will house businesses from creative industries. Taystee Create LLC, a newly formed partnership affiliated with developer Janus Partners LLC and Monadnock Construction, are calling the redevelopment project CREATE @ Harlem Green.

Kent Swig, president of Swig Equities, refinanced 110 William Street, a 900,000-square-foot office property for $161.5 million, which was led by a $141.5 million first mortgage provided by UBS Real Estate Securities and Barclays Capital. In addition, Pearlmark Real Estate Partners provided a $20 million mezzanine loan.

A stalled Hell’s Kitchen hotel and condominium project that’s now just a large foundation filled with a few inches of standing water could get a much-needed infusion of $15 million, thanks to a Chetrit family member and a Brooklyn partner, who are poised to take control of the property. But a minority investor in the project, a firm that also does construction work, is trying to halt the new partnership, saying that it has not given consent.

After spending two years cleaning up 23 acres of Willets Point, the Related Companies and Sterling Equities will start developing the site with a hotel and retail development just east of Citi Field on 126th Street in officially unveiling the plans for the 50-years-in-the-making, $3 billion project.

The developers will start with $100 million in capital funds from the city to demolish faulty infrastructure, clean contaminated lands and build permanent improvements that form the groundwork of the project. Once complete, they’ll begin construction on a 200-room hotel and 30,000 square feet of retail and restaurants.

A New York state judge has ruled that Manhattan firm Davis Polk & Wardwell can remain in their office at 450 Lexington Avenue, pending the resolution of a $63 million rent dispute.

The judge stayed the effect of a termination notice that the landlord, Lexington Operating Partners LLC, sent to Davis Polk on June 6 for alleged nonpayment. An arbitrator will decide whether the landlord’s rent hike of $63 million per year will stand, per a stipulation in the lease.

Mayor Michael Bloomberg announced that more than $100 million in financing will be made available to property owners who perform clean heat conversions. Last year, the city banned the heaviest heating oils, which are still used in about 10,000 structures, and urged owners to switch to cleaner heating solutions by 2015. Bloomberg said the conversions would generate $300 million in construction activity.

On the heels of a record $5.7 billion loss during the last fiscal year, Sony is weighing selling the 37-story Midtown skyscraper that serves as its U.S. headquarters. Sony has been engaged in talks with the private equity firm Blackstone Group over the various options for, including the possible sale of, their solely owned U.S. headquarters at 550 Madison Avenue, which is said to be worth between $700 million and $1 billion. Sony has also considered the possibility of renting out a major section of the property, or selling and leasing back a portion.

The Cornell-Technion tech campus slated to open on Roosevelt Island in 2017 will help create an “F-train tech corridor. Not only will the school help boost the city’s tech industry, but that it will also boost the local real estate market.

While the Landmarks Preservation Commission comes under fire from multiple angles, one Financial District landlord is working with the agency on the designation for his building. Allan Fried, who bought the vacant 15-story American Stock Exchange building at 86 Trinity place for $17 million last year with Michael Steinhardt, wrote to the LPC saying he has no objection to designating the building’s exterior — even as he plans a hotel conversion of the building.

The Fisher Brothers is planning on adding an underground retail component to a trophy Sixth Avenue office property. The landlord’s vision for 1345 Sixth Avenue mimics Harry Macklowe’s glass cube retail addition to the GM Building, which was leased by Apple and has become one of the city’s most lucrative retail locations.

Despite ongoing uncertainty in the global economy, a select number of real estate investors are still making huge profits on timely deals by flipping trophy properties for double what they paid for them in the recession. Their success has engendered confidence in New York as a safe haven for investment.

A judge in Manhattan Supreme Court rejected the union of operating engineers’ effort to block the city from implementing the changes to regulations that govern crane operators. The debate over the control of crane operators, who will hire them and how they will be vetted, has been ongoing since the change in Department of Building’s regulations was proposed in February at a public hearing.

A four-story, 100,000-square-foot West Harlem retail development that’s slated for completion by the end of 2012 has landed three new retailers. Discount shoe store DSW, Blink Fitness and Joe’s Crab Shack have all signed on to move in to 301-303 West 125th Street at Frederick Douglass Boulevard by mid-2013.

A proposal to build a skinny 14-story building at 207 West 75th Street on the Upper West Side has been withdrawn from the Board of Standards and Appeals. The plan, to build a 141-foot-tall structure on a site zoned for buildings no taller than 71 feet, was previously rejected by the Upper West Side community board after the neighboring co-op board aired concerns over obstructed views and out-of-character development.

Jack Cayre’s Midtown Equities Group has signed a “soft contract” to purchase 180 Water Street for between $165 million and $180 million. The 24-story building, between John and Christopher Streets, is owned by Melohn Properties and leases all of its 509,000 square feet to the city’s Human Resources Administration.

The Hospital for Special Surgery is the latest hospital with expansion plans on the Upper East Side as it hopes to build a 13-story ambulatory care facility three blocks away from its 535 East 70th Street building. The building would span from 515-523 East 73rd Street through the block to 512-518 East 74th Street.
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