Taconic Investment Partners is moving in a new direction with its project at Hunts Point’s landmarked BankNote building.
Taconic, along with Denham Wolf Real Estate Services, has made a multi-million dollar commitment to transform one of the South Bronx’s most iconic buildings into an epicenter of higher education, in an underserved community.
The century-old structure is one of the largest in the South Bronx and is an enduring landmark in a neighborhood dominated by new structures. It was there that current Bronx Borough President Ruben Diaz chose to have his inaugural reception.
“It’s a little bit of a departure from what we’ve done,” said Charles Bendit, co-CEO of Taconic, a firm that redeveloped 95 Wall Street before selling it. Bendit has teamed up with Paul Wolf, president of Denham Wolf, a non-profit real estate group whose past projects include developing the Scandanavia House in Midtown for the American-Scandinavian Foundation and redesigning the Baryshnikov Arts Center in Hell’s Kitchen.
Bendit said on top of the $32 million they spent purchasing the BankNote commercial building at 890 Garrison Avenue in 2007, the development team plans to pour another $50 million into the project to transform portions of the building into educational use.
When the investors originally bought the 405,000-square-foot building in the pre-bust days, their intention was to lure Manhattan office dwellers seeking lower rent. But as the economy changed, so did Bendit and Wolf’s plans.
Bendit said that an existing school in the building, the John V. Lindsay Wildcat Academy Charter School, which will remain there among the new tenants, inspired the developers to transform the property into a mixed-use, commercial-educational center.
“There aren’t enough schools out there and there are a lot of people who need job training in the South Bronx,” Wolf said. “This really addresses a need in the community.”
Bendit and Wolf say they expect between 100,000 and 200,000 square feet of the building will be occupied by non-profit educational facilities. The space will be leased out for $19 per square foot to the mid-$20s per square foot, depending on the part of the building, according to Wolf.
A concern with this kind of undertaking, however, is attracting enough institutions to move in, according to Suzanne Sunshine of S. Sunshine & Associates, a real estate services firm for non-profits. While she says that the BankNote is a “gorgeous building” and “a great space for non-profits,” she is concerned that leasing the large volume of space available could be a challenge.
“Leasing right now in that neighborhood to large tenants is a challenge,” Sunshine said. “We’re in a tough market right now to lease a lot of space to a non-profit.”
Still, Sunshine says that the asking rent per square foot of $19 is an “excellent” deal for tenants, particularly compared to similar space in Manhattan where she says rent can be around $10 more.
Current tenants include the Arthur Aviles Typical Theatre, non-profit group Sustainable South Bronx, and Wine Cellarage, a professional wine storage facility. There are no plans for them to relocate at this time.
Wolf said that the project is both a meaningful and prudent investment for the developers.
Hunts Point, a community saddled with an organic fertilizer plant, a state-run sewage processing plant and two detention facilities, has worked hard over the last two decades to shed its image as an unsafe environment. There is currently no institution of higher education or trade school in the community, according to Jeremy Sautter, programs director with the Hunts Point Economic Development Corporation, a non-profit group that works to cultivate economic opportunities for residents.
“I think [the development] definitely brings a positive image to Hunts Point,” Sautter said.
The building should be ready for move-ins in the next six to eight months, after new cosmetic and infrastructure upgrades, such as new bathrooms and a heating, ventilation and air conditioning system.
Even so, Wolf said, their property is already “the most beautiful building in the South Bronx.”