Capital Real Estate: LICH controversy heats up

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LICH, TAKE TWO—”40-story tower on LICH site could prove contentious,” by Capital’s Sally Goldenberg and Dan Goldberg: “A redevelopment plan for the site of Long Island College Hospital, the future of which became a campaign issue in Mayor Bill de Blasio’s 2013 election, is being shaped by a new coalition announced on Friday. But Brad Lander, a City Councilman involved in that coalition, is already questioning the developer’s plans for a 40-story tower on the site. Fortis Property Group, which is in the process of buying the land housing LICH, announced it has joined with local residents and elected officials to map out possibilities for the site.”

—”Community Board Rejects Balconies in LICH Condo Conversion Plan,” by DNAinfo’s Nikhita Venugopal: “A plan to modify and restore Long Island College Hospital’s landmarked Polhemus Building met with overall approval from a Community Board 6 committee Thursday night—except a part that would add balconies for each new condo.”

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NEIGHBORHOOD WATCH—”New Mixed-Income Housing on the Lower East Side,” by Times’ Ronda Kaysen: “For nearly half a century, the view south from the corner of Essex and Delancey Streets has been of vacant parking lots behind chain-link fences, carving a desolate hole in the otherwise vibrant neighborhood. But this month, construction finally began on a $1 billion redevelopment project that will reshape the Lower East Side. With financing secured, developers can now begin work on Essex Crossing, a 1.65 million-square-foot project that will eventually add 1,000 units of housing to the area, half of which will be permanently affordable.”


EYE ON ASTORIA—”Two more massive projects planned for Astoria,” by Crain’s Joe Anuta: “Two large-scale developments are being planned for more than seven areas of Queens waterfront,Crain’s has learned. And along with two other massive projects—known as Halletts Point and Astoria Cove—the mixed-use complexes are set to transform part of a gritty peninsula west of Astoria into a new community along the East River.

BIG DEALS—”Blackstone sells ex-NYT offices to Columbia Property Trust for $516M,” by Real Deal’s Tess Hofmann: “Blackstone Group sold the office portion of the former New York Times building for $516 million to Columbia Property Trust, just four years after purchasing it for $160 million. The property is a 12-story office condo at 229 West 43rd Street in the Times Square area, in the historic building that housed the New York Times headquarters from 1913 to 2007. Since its purchase, Blackstone has spent $105 million on renovations and signed major tenants including Yahoo, which is leasing five floors.”

—”Boston firm seeks $1B-plus construction loan for its luxury condo towers—it’s an opportune time,” by Crain’s Daniel Geiger: “A Boston-based real estate investment firm is negotiating a construction loan totaling at least $1 billion with Wells Fargo and other major lenders. GID is seeking the financing for three luxury residential towers at Riverside Center, west of Columbus Circle, according to sources. The company purchased the development sites earlier this year in partnership with the Abu Dhabi Investment Authority for more than $400 million. The interest among lenders, sources said, comes despite concerns in recent months over a glut in luxury development.”

SHELL GAME—”Russian Billionaire Sells Time Warner Center Penthouse for $50.1M,” by Observer’s Morgan Halberg: “A penthouse at 25 Columbus Circle has sold for $50.9 million. Which, while no record in this day and age of steroidal sales, is still pretty impressive. City records show that the seller is Southerdown Inc., which as the New York Times reported in its “Towers of Secrecy” series earlier this year is none other than Russian financier Andrei Vavilov. The buyer, meanwhile, remains mysterious, at least for now, having the considerably less colorful name for its shell company: Columbus Family LLC.”

SENIOR SWAGGER—”Luxe living planned for seniors on the Upper East Side,” by Post’s Lois Weiss: “Merchants Hospitality has bought five buildings on the Upper East Side that it plans to co-develop into a luxurious Maplewood Senior Living facility, The Post has learned. The 213,000-square-foot tower designed by Handel Architects will include gardens and an indoor pool. The buildings at 1802, 1804-06, 1808 and 1810 Second Ave. and 303-305 E. 93rd St. were purchased for $111 million in an all-cash deal from five separate sellers.”

TRANSIT TRIBULATIONS—”Aging Infrastructure Plagues Nation’s Busiest Rail Corridor,” by Times Emma G. Fitzsimmons and David W. Chen: “…In a sign of the problems plaguing New Jersey Transit, the agency preemptively announced on Sunday that its Monday morning service would be delayed because of ‘power issues’ and repairs on Amtrak’s overhead power lines. …

“The delays are not just miserable for the passengers stuck on the trains; they have a ripple effect, sending more traffic onto roads and wasting hours for commuters who could be working. The shutdown of the corridor for one day could cost the country $100 million in added congestion, productivity losses and other effects, according to a report from the Northeast Corridor Infrastructure and Operations Advisory Commission, a group established by Congress to improve the network.”

—”Cuomo’s Plan to Close M.T.A. Funding Gap Revives Familiar Debate,” by Times’ Matt Flegenheimer: “For decades, it has been New York’s great underground contradiction: The sprawling transit system—the municipal feature perhaps most likely to spawn complaints from city residents about their government—is operated by the state. And for at least as long, elected officials have moved aggressively to characterize mass transit troubles as someone else’s responsibility. …

“It was against this historical backdrop that Gov. Andrew M. Cuomo, a Democrat, last week delivered a long-awaited update on the agency’s five-year capital plan, reinvigorating familiar debates about the proper scope of the city’s role in its own transit destiny.”

—”Can Staten Island’s Infrastructure Keep Up With Its Development?” by YIMBY’s Rebecca Baird-Remba: “All of this new construction will help revitalize the most transit-accessible part of Staten Island. It’s already the slowest-growing and least densely populated borough, and the extra tax revenue and tourist dollars could be used to fix some of its underlying transit issues. But if these buildings are successful, they’ll illuminate many of the pressing problems Staten Islanders have been complained about for years: traffic, badly maintained roads, and slow express buses.”

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WIFI WOES—”When the Firm Is Wired but the Office Isn’t,” by WSJ’s Keiko Morris: “By now, it is a given in New York City that many companies in the tech and advertising sectors prefer older loft buildings in nontraditional office neighborhoods, where they offer millennial workers must-haves such as coffee bars and Ping-Pong tables. But finding all that in a building with robust Internet options can be tricky to pull off. Internet capacity can vary widely from building to building, especially in neighborhoods populated with the funky loft spaces coveted by creative firms, technology consultants and brokers said.”

MARKET TRENDS—”The Housing Market Still Isn’t Rational,” by Robert J. Shiller: In a Times column, Yale professor Shiller argues the real estate market is less rational than the stock market and is therefore not guided by the efficient market hypothesis, which holds that investors cannot beat the stock market because stocks always trade at their fair value. “Developers and builders will, one way or another, exploit overpricing, increasing effective supply, in that way bringing real estate prices down. …

“The bottom line is that there is no reason to assume that the real estate market is even close to efficient. You may want to buy a house if you love it and can afford it. But remember that you cannot safely rely on ‘comparable sales’ to judge that the price is fair. The market isn’t efficient enough for that.”

SPACE SAVER—”Making More Space in a One-Bedroom Apartment,” by Times’ Michelle Higgins: “Can’t find a decent two-bedroom at a price you can afford? Try searching for a one-bedroom big enough to turn into two. That’s what some buyers are doing as soaring prices and a scarcity of listings in New York City make it tough to jump to the next apartment size up. Plus-size one-bedrooms—the kind that would allow, say, a couple expecting a baby to put up a wall to create another bedroom—are increasingly sought-after, brokers say, as less expensive alternatives to existing two-bedrooms.”

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PARKS AND REC—”Brooklyn Bridge Park Opening New Vistas,” by Times’ Lisa W. Foderaro: “…In recent months, Brooklyn Bridge Park has faced its share of travails, which at times seemed to eclipse the actual parkland. … In August, however, attention will return to the innovative landscapes that have made the park, which is built on a series of piers, one of the most popular and publicized spaces in New York. Two new sections—at opposite ends—are set to open, filling in gaps with new lawns, flower gardens, winding waterfront paths and education centers.”

—”False premises on Brooklyn Bridge Park’s Pier 6,” by Regina Meyer for Crain’s:Meyer, president of Brooklyn Bridge Park, argues in an op-ed against Crain’s editor Jeremy Smerd, who previously questioned tax breaks the park had received. “Our proposal is far from a special developer arrangement. The park’s commercial sites fund the park through payments in lieu of taxes (PILOTs) and rent. Rent levels were determined through a highly competitive selection process, based on PILOT levels equivalent to taxes owed by any developer in the city.”

—On July 13, Smerd wrote “Given the investment the city and state are making on the water, I believe a developer could have made a profit on those condos without the tax break. But it’s too late. The ship has sailed. What the park needs now is legislation that would allow it to collect more revenue from existing tenants. Without that—or a generous benefactor—development appears inevitable.”

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SLOW ART START—”Ground Zero Arts Center to Shrink Further,” by Times’ Robin Pogrebin: “The Performing Arts Center planned for the former World Trade Center site was dealt a serious blow on Thursday when the corporation in charge of downtown redevelopment insisted that the project come in at no more than $200 million — about half the original estimated cost. … The arts center—which originally was to contain the Signature Theater and the Joyce Theater—has been curtailed and delayed.”

DOWNTOWN DREAMS—”Lower Manhattan Development Corp. submits project wish list for Downtown,” by Real Deal’s Rich Bockmann: “The $50 million sum received in a settlement over a botched cleanup at Ground Zero should go toward completing the final leg of Hudson River Park and improving open spaces on Water Street, among other projects, the Lower Manhattan Development Corporation said Thursday. At a public board meeting, LMDC administrators submitted a list of 10 projects they’d like to fund with federal money, hammered out in a settlement with construction firm Lend Lease back in March. Other groups are expected to submit proposals, and the LMDC board of directors will vote on how to dole the money. A public hearing is scheduled for September.”

LEADING E.D.C.—”De Blasio appoints 10 to E.D.C. board,” by Capital’s Laura Nahmias and Sally Goldenberg: “Mayor Bill de Blasio on Friday appointed 10 new members to the New York City Economic Development Corporation, including several with significant ties to the mayor’s office. Six of the 10 raised money for or donated to de Blasio’s 2013 campaign, record show. The appointments follow de Blasio’s recent announcement of Maria Torres-Springer as the new president of the agency, which guides the city’s economic development agenda. She replaced Kyle Kimball, a Bloomberg administration holdover.”

INDUSTRY MOVES—”Elliman taps Leslie Wilson for key new development role,” by Real Deal’s E.B. Solomont: “Leslie Wilson, a former senior vice president at the Related Cos., will now oversee new development marketing efforts at Douglas Elliman, The Real Deal has learned. Wilson, who was one of Related’s top salespeople, started Monday as senior executive vice president and managing director of Douglas Elliman Development Marketing. She will be the top deputy to Susan de França, president and CEO of the brokerage’s new development division.”


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