The New York Wheel, a more than $900 million project that was plagued with infighting and cost overruns, was meant to bring a world class tourist destination to Staten Island. Rich Marin, the project’s founder and former CEO, once claimed the project would transform the borough’s waterfront into the “gateway to America.” But despite the attraction’s official death on Tuesday, multiple brokers said the area’s real estate market should escape its wreckage relatively unscathed.
Staten Island’s residential market should see almost no impact, as most buyers or renters in the area were likely not basing their housing decisions on whether or not a giant Ferris wheel would arrive on the waterfront, brokers said. But the commercial market is a different story, as sources said the wheel’s failure could deter future investors and businesses from coming to the borough.
“Initially, it’s a pretty big blow,” said Joe Tirone, broker and owner of Staten Island’s Community Home Brokerage, “and, personally, it cost us a pretty substantial deal.”
Tirone said his company had been working with a local developer to bring a mixed-use project to a plot of land that would have overlooked the wheel. The project had already stalled as issues facing the wheel piled up, and now that the wheel plans are abandoned, the mixed-use project will likely face the same fate.
While the impact from project’s cancellation would likely be limited, it may still be noticeable, particularly for stores that would have been located right by the site, according to Joseph Tsomik of Homes R Us Realty.
“If you’re an investor looking to purchase a business that’s going to be around that area, that’s one less attraction,” he said. “It would have been a great attraction.”
The wheel would have been located right on the waterfront of the borough’s St. George neighborhood, and broker Ron Molcho of American Homes Group stressed that other developments in the neighborhood were still proceeding apace. This would limit the amount of damage the failure of the wheel could do.
“There’s still tremendous growth in that area,” he said. “You have the Empire Outlets. You have condo buildings there. You have a lot of things happening in the St. George area in addition to what the wheel was going to bring, so, no, I don’t think it makes it less desirable.”
Empire Outlets, the outlet mall from BFC Partners, is another long-awaited project for the neighborhood that is now set to open in mid-April of next year. Retail tenants include Levi’s, H&M and Columbia Sporting Goods.
Staten Island’s Casandra Properties is handling leasing for Empire Outlets, and broker James Prendamano said the wheel shutting down was just a minor bump in the road for it. He acknowledged that it would have an impact on the project but said that the mall was initially conceived without the New York Wheel in mind, and its location and expected number of tourists were still solid.
“Of course, it’s a hiccup,” he said, “but these demographics with this type of an outlet work anywhere.”
Tirone echoed this, describing it as “unrealistic to say it’s not going to be affected” but maintaining that “eventually, it’s going to prove to be a success.”
Outside of New York real estate, the New York Wheel’s downfall marks one of the largest EB-5 failures in the program’s history. However, Canam Enterprises, the regional center which handled the funds from immigrant investors, said that the project had already created enough jobs for its investors to gain residency status in the United States.
Meanwhile, the project’s developers, Lloyd Goldman and Jeffrey Feil previously said they will sell the wheel parts that have already been built. And lawsuits between the developers and their contractor may also resume.
The city — which recently refused to provide a tax-exempt bond to keep the project afloat — remains committed to finding a new use for the roughly eight-acre site, according to the Economic Development Corporation, and multiple brokers expressed confidence that something would eventually go up on the land.
Mitchell Moss, a professor of urban planning at New York University, said he did not have a specific idea of what would make an ideal fit for the plot but described the views of the Manhattan waterfront from Staten Island as one of the best parts of the city — something that doesn’t require a Ferris wheel to be enjoyed.
“Sometimes you do better the second time around,” he said. “The best thing about the project not happening is that we’ll probably come up with a far better project.”