The Daily Dirt: Pied-à-terre, back from the dead?

TRD New York /
Sep.September 13, 2019 11:15 AM
A tax much-derided by the real estate industry may rise from the dead. (Credit: iStock)

A tax much-derided by the real estate industry may rise from the dead. (Credit: iStock)

IT IS ALIVE! Maybe! The pied-à-terre tax could be on the state legislature’s agenda next year.

Just before the budget passed, an annual levy on properties valued at $5 million or more was scrapped in favor of new one-time transfer taxes. But Sen. Brad Holyman says he plans to revive the measure in January, Erin Hudson reports

“I hope to have a bill that’s ready for prime time as it were,” he said. 

Versions of PAT have repeatedly been proposed over the years, but this year was the closest it came to becoming a reality. It also drew considerable criticism from the real estate industry, which was particularly concerned about the fact that the levy would be applied annually in perpetuity. The one-time transfer and “mansion” taxes that ultimately took its place were viewed as a compromise of sorts, though some residential brokers grumbled about the additional costs to clients. A recurring tax though, said REBNY president Jim Whelan, would be “very destructive” to the market.

“So what do you gain out of it?” he said on Thursday. “There will be less jobs, less tax revenue for other government services.”

Last legislative session, landlords and developers were caught off guard by the scope of the changes made to the state’s rent stabilization law. The success of the legislature in passing a PAT, as well as other more progressive measures that were left on the cutting room floor last session, could be key indicators on how far left the state is willing to go.

Brookfield Property Group has waded into the gun debate. It has company. 

Brookfield Property’s Ric Clark is among 145 CEOs who signed a letter urging Senate leaders to expand background checks on all guns sales and pass stronger “red flag” laws, which would limit sales to potentially dangerous people, E.B. Solomont reports

“Doing nothing about America’s gun violence crisis is simply unacceptable,” the CEOs wrote in the letter, which was shared with the New York Times.

RXR Realty’s Scott Rechler, who has previously blasted out mass emails weighing in on gun violence and the need for reform, also signed the letter. Others in the industry included Thrive Capital’s Joshua Kushner, brother of White House advisor and President Trump’s son-in-law Jared Kushner; Brian Chesky of Airbnb, Sarah Friar of Nextdoor, Gary Beasley of Roofstock, Dan Doctoroff of Sidewalk Labs, Yashar Nejati of thisopenspace and Aaron Block of MetaProp.

Last week, to the surprise of many, Walmart — the largest retailer in the country — announced that it would stop selling certain guns and ammunition. It also called on lawmakers to reauthorize a ban on assault weapons.

What we’re thinking about next:
Will Thor Equities be evicted from 545 Madison? Send a note to [email protected]

Residential: The priciest residential closing recorded on Thursday was for a condo unit at 270 Riverside Drive on the Upper West Side, at $6.7 million.
Commercial: The most expensive commercial closing of the day was for student housing at 55 John Street in Lower Manhattan, at $101 million. Educational Housing Services is the buyer, and Tessler Developments was the seller. 

The largest new building filing of the day was for a 45,706-square-foot residential building at 1120 Saint John’s Place in Crown Heights. Complete Development filed the permit application. 

The priciest residential listing to hit the market was for a 45 Greenwich Street in Tribeca, at $20 million. Corcoran Group’s Danny Davis has the listing. — Research by Mary Diduch

A thing we’ve learned…

WeWork’s flagship office in Shanghai was once an opium factory! The 100-year-old mansion, located in the Shanghai’s Jing’An district, has served as an opium factory, a munitions warehouse and artists’ studios, according to Interior Digest. Thank you to Kevin Sun, who spotted this gem.

Top stories from our other markets:

California’s sweeping new legislation to reclassify independent contractors of the gig economy as employees with all the requisite benefits, would exempt real estate brokers. Under the provisions of the bill — which Gov. Gavin Newsom is expected to sign — agents would not be included in the so-called “ABC” test that California will require to determine whether a worker should be classified as an independent contractor or an employee.

Chicago has seen scores of condo buildings de-converted into apartment complexes in the last year, as investors have seized on the growing appetite for rental units. That trend has slowed slightly, but a City Council committee still approved a measure making it more difficult for investors to de-convert properties. It will raise the required buyout from 75 percent of condo owners to 80 percent.

Landlords and developers are split over whether the state’s landmark rent control bill that will cap yearly rent increases and expand protections for millions of tenants will have as big an impact as similar legislation appears to have had in New York. Some say it will lead to spiking rents on vacant units and fewer renovations, while others say the demand is so high from investors that it won’t send owners running.

A joint venture of Property Markets Group and Greybrook Realty Partners closed on a $162 million loan for a rental tower planned for downtown Miami. The partners broke ground on the project, a 49-story, 646-unit building, in June. Centennial Bank and Square Mile Capital are the lenders. The project will be part of new apartment brand for PMG. — Compiled by Alexi Friedman

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