UPDATED, April 27, 7:39 p.m.: Legend has it that part of Dave Thomas’ strategy for growing Wendy’s into one of the world’s largest fast food chains entailed putting new franchises next to existing McDonald’s locations.
Michael Stern may be trying something similar with Gary Barnett. The JDS Development Group leader followed Extell Development’s chief to Billionaires’ Row and to Downtown Brooklyn, and now he’s unveiled plans for a 77-story mixed-use tower next to Extell’s 80-story One Manhattan Square project in Two Bridges.
JDS — which is busy developing supertall luxury projects at 111 West 57th Street with Property Markets Group and 9 Dekalb Avenue with the Chetrit Group — will partner with frequent collaborator SHoP Architects to construct a residential and retail complex at 247 Cherry Street on the East River waterfront. The Lo-Down first reported the news.
The planned 900-foot tower will feature about 600 rental apartments, including 150 units that will be permanently affordable. The ground floor is being reserved for retail on Cherry Street and Rutgers Slip.
According to preliminary plans, the building will have a mixture of studios, one-bedroom and two-bedrooms unit, with affordable apartments interspersed throughout the building.
“We see it as a model of responsible development moving forward,” Stern said. “Take an under-utilized affordable housing asset and get some value out of it.”
To move forward, JDS and SHoP, the co-developer, have agreed to purchase the site’s 500,000 square feet of development rights for $51 million.
Stern’s latest foray into the luxury residential development comes amid widespread uncertainty regarding the Manhattan market’s prospects, with fears that a coming supply glut will exacerbate already softening demand and slipping prices.
Barnett, widely credited with kicking off the Billionaires’ Row boom with One57, lowered the total sellout price of One Manhattan Square in January by $207 million. He told The Real Deal that the revised prices better matched existing market conditions. Even with the 815 condo units mostly hovering between $1 to 3 million, the total sellout of $1.87 billion would represent a record for Lower Manhattan.
JDS’s new Manhattan property, meanwhile, has been the subject of a legal dispute since 2012.
Roy Schoenberg’s Little Cherry Development LLC in 2012 agreed to pay $4 million for the parcel, which includes a one-story building that formerly housed a Pathmark Pharmacy. When the deal fell apart, Little Cherry sued the nonprofit owners, Two Bridges Neighborhood Council and Settlement Housing Fund.
The suit is ongoing, but Settlement Housing Fund’s Alexa Sewell said she was “100 percent certain” her organization would prevail in the suit.
Terms of the deal with JDS call for a small community center on Cherry Street to be demolished to make way for the new tower. As part of the agreement, the developers will also renovate the adjacent senior building and will add a new, 4,600-square-foot community center and offices for Two Bridges Neighborhood Council in the residential tower.
The tower itself will abut an existing senior housing development, and it will cantilever over a portion of the old pharmacy. Little Cherry and Extell currently hold long-term leases in the pharmacy building and when those leases are up, that building also will be demolished to create a 10,000-square-foot commercial space.
Construction won’t begin for at least two years.
Besides Extell’s One Manhattan Square, the proposed tower will join other developments on the East River waterfront, including L+M Development Partners’ 265-275 Cherry Street. The Starrett Corp. is also rumored to be planning a project in the area.
JDS last week revealed new renderings and details of its American Copper Buildings rental project in Kips Bay. Earlier this week, the developer and partner the Chetrit Group received approval from the Landmarks Preservation Committee to move forward with its 1,066-foot tower at 9 Dekalb Avenue in Downtown Brooklyn, a mere block from Extell’s 59-story City Point development.
This story was updated at 7:39 p.m. on April 27 to reflect that the project will be a rental building.