The Real Deal New York

Sun Equity, Heskel Group land $60M loan for controversial Queens development

Activists temporarily shut down retail development in September
By Kevin Sun | January 11, 2019 03:00PM

A rendering of 40-31 82nd Street

After facing local resistance and a temporary work stoppage, Sun Equity Partners and Heskel Group are forging ahead with their retail development in Jackson Heights with the help of some new financing.

Los Angeles-based Calmwater Capital provided the developers with about $60 million in financing, according to city property records recorded on Friday. The loan includes a $29 million building loan and a $31 million refinanced loan, and replaces a 2016 loan from RWN Management worth $22 million.

In September, a local advocacy group backed by then-congressional candidate Alexandria Ocasio-Cortez managed to force a stop-work order for the site at 40-31 82nd Street, citing zoning violations. The order was rescinded two weeks later, after the developers filed new plans.

Sun Equity and Heskel acquired the property for $27 million in 2016, with plans to build a 160,000-square-foot building. Plans for a 13-story residential tower above the retail portion of the site were scrapped after city officials withdrew their support for a proposed rezoning.

Heskel Group’s rezoning proposal had raised eyebrows due to political donations made around the time of the application.

According to Calmwater’s website, the lender primarily provides funding for projects in the western United States, with just three prior transactions in the Northeast. The loan to Sun Equity would be the company’s largest northeast loan by far, surpassing a $26 million loan for the Metroplex in Far Rockaway.

Representatives for Calmwater and Sun Equity did not immediately respond to requests for comment.