What sunk the massive Astoria Cove development in Astoria? The developer says the lack of 421a tax benefits, but documents indicate it was the financials on the 2.2 million-square-foot complex that were shaky from the start.
Developer Alma Realty was relying on relatively high rents for apartments in a neighborhood that doesn’t command a premium; and of the planned 1,763 units, some 27 percent would have been rented to low- or moderate-income tenants paying less than the market rate.
“That project needs a $65-a-square-foot rent and the rents out there are in the high $40s,” an anonymous developer familiar with the deal told Politico. “It was sort of a lack of sophistication on behalf of all involved.” Further, the developer agreed to pay union wages on the project, which would have made it more expensive.
According to Politico, Alma failed to obtain the tax break before its sunset in June 2015, nor did it obtain it during a seven-month extension period.
Alma insists the project’s failure is tied to the expiration of 421a, an explanation corroborated by City Hall. Sources speculated that Alma will ultimately sell the site, as it would be “nearly impossible” to obtain financing. [Politico] — E.B. Solomont