Troubled 4-acre Flushing site marketed as revived megaproject

Sources say "dumping ground" once slated for 450-unit condo complex could fetch $120M
By Mark Maurer | Twitter_logo_blue copy March 17, 2016 03:20PM

A Borough Park-based investor group led by Chaim Babad and Reuven Rivlin is looking to sell a long-vacant 3.7-acre Flushing site once slated for hundreds of condominium units, The Real Deal has learned.

The sprawling lot between the condo complex Sky View Parc and the former home of Korean supermarket Assi Plaza offers as-of-right 870,000 buildable square feet. The owners hired a CBRE team to market the site at 39-08 Janet Place, also known as 131-35 Roosevelt Avenue, as an opportunity to revive plans for a mixed-use megadevelopment, according to sources familiar with the property.

The site does not have a formal asking price, but area brokers told TRD it is expected to sell for north of $120 million.

“The challenge is this is a huge site, so that narrows the possibilities of who can pull this together,” a source told TRD. “It would have to be a large developer with the energy and wherewithal to take the risk — someone who understands the Flushing market.”

The buyer would also have to be aware of the site’s tumultuous history.

The investor group, which includes Rivlin’s ABS Management & Development and Babad’s Babad Management, acquired the site for $26 million from Vintage Group in 2006. LEV Development Group, founded by Nest Seekers International CEO Eddie Shapiro, then spearheaded development plans for a large-scale complex on behalf of the new owners.

At the time, plans called for a five-tower mixed-use development called River Park Place to be designed by architect Ismael Leyva. The proposed complex on the Flushing River waterfront would span 757,000 square feet, including about roughly 450 apartments across 395,000 square feet. There would also be 313,000 square feet of commercial space – hotel and retail – as well as a 7,500-square-foot community space and 1,000 parking spaces.

Amid the market downturn, the partnership struggled to secure financing and the project never got off the ground.

The city approved the architectural and construction plans prior to the downturn, according to sources and filings. A stop-work order currently exists on at least one of the parcels.

CBRE is touting Leyva’s old designs and LEV’s proposed building specs in its marketing of the land, though the residential component could be built as either condos or rentals, sources said.

The site, located less than a mile from CitiField, has been the subject of three lawsuits related to developer Shaya Boymelgreen’s failed attempt to take ownership of the site.

In December 2014, Boymelgreen filed a complaint against ABS, alleging that the ownership group refused to consummate the sale of the site to him for $60 million. ABS filed its own complaint in March 2015 against Boymelgreen, arguing that he failed to close on the purchase. Both lawsuits were discontinued in October and August 2015, respectively, court records show.

In a third suit, filed in November 2015, Boymelgreen was accused by Romspen Mortgage Investment Fund of stiffing the Canadian lender on the deposit for a $34 million acquisition loan. Although Boymelgreen returned the funds after the deal fell through, he refused to pay $710,000 toward the $860,000 deposit, the lender claims. That lawsuit is ongoing.

The site nearly fell into foreclosure in 2012, when Ohio-based U.S. Bank filed a lis pendens. The owners saved the site in 2014 by securing a $28.5 million mortgage. They’ve held off on moving forward with development plans.

For now, the site serves as a “dumping ground” littered with “broken glass, weeds, rocks and industrial tin containers,” according to a 2011 Queens College study on the Flushing waterfront.

CBRE’s William Shanahan, Paul Leibowitz, David Krantz and Eli Klapper are marketing the site. Shapiro and the brokers declined to comment, while the owners and Boymelgreen could not be reached. Massey Knakal Realty Services previously had the listing.

The surrounding area has seen a flurry of investment sales activity in recent years. An affiliate of local hospitality development firm King’s USA Group picked up the Assi Plaza site for $55 million in 2014, and the Blackstone Group acquired the retail and parking garage at Sky View Parc for $400 million last year.

Kyna Doles contributed reporting.