Inwood developers outlasted lawsuit, but damage is done

After two years of delay, builders face recession, city budget crunch

New York /
Nov.November 25, 2020 07:30 AM
Joy Construction’s Eli Weiss (Getty; Google Maps)

Joy Construction’s Eli Weiss (Getty; Google Maps)

A lawsuit’s demise secured Inwood’s rezoning this week, but the litigation may have done lasting damage to some projects.

The state’s highest court on Monday rejected a bid to appeal a lower court’s reinstatement of the rezoning, paving the way for the creation and preservation of 5,000 affordable housing units.

When the City Council approved zoning in 2018 to encourage housing construction, the economy was humming and the city’s coffers were overflowing. Now developers and housing-finance agencies must grapple with severe financial constraints brought on by the pandemic.

“These types of challenges effectively double the amount of time that it takes to get a discretionary approval,” said Jim Power, a partner at real estate law firm Kramer Levin. “It is a starkly different economic and real estate climate than it was two years ago when this rezoning was approved.”

Before a five-judge panel voted unanimously in July to reinstate the rezoning, Joy Construction’s Eli Weiss and Maddd Equities — facing protracted litigation and an uncertain outcome — were prepared to scrap plans to build 611 apartments at 3875 Ninth Avenue and instead do an industrial project.

The developers are now moving forward with the housing project, but the timeline will depend on when the cash-strapped city provides financing.

Weiss said public subsidies for projects like the Ninth Avenue development typically range from $125,000 to $175,000 per unit. Though the de Blasio administration has restored much of the Department of Housing Preservation and Development’s capital budget, the city’s resources remain limited.

“Now we’re going to need the city to stand behind its commitment to Inwood,” Weiss said.

HPD indicated that it is “committed to moving forward as soon as possible.”

“With restored capital, we’ve been working closely with our development partners on the timing of financing for all the critical projects in our pipeline, and to continue delivering on the placemaking investments and affordable housing that New Yorkers need,” Jeremy House, a spokesperson for HPD, said in a statement.

Taconic Partners’ Charles Bendit said construction on his company’s 725-unit affordable housing project at 410 207th Street likely would have started a year ago had the rezoning not been challenged.

“Now we’re putting together the pieces again,” he said. “We’re going to look at alternative financing packages.”

In the past year, a few lawsuits have followed a trajectory similar to that of the Inwood challenge. A state judge sided with opponents of three projects in Two Bridges, but his decision was reversed by an appellate court. Another state judge ruled Mitsui Fudosan and SJP Properties had built as many as 20 more floors at 200 Amsterdam Avenue than the city should have allowed. The developers and de Blasio administration are awaiting the results of their appeal, which was heard last week.

Developers are anticipating a rezoning of Gowanus next year that could add 8,000 apartments to what was once a heavily industrial area. Opponents would likely challenge that result as well, but the failure of the Inwood lawsuit figures to diminish their chances.

Though the Inwood plaintiffs, a coalition called Northern Manhattan is Not for Sale, has exhausted its legal options, it pledged Monday to keep fighting the city’s “racist housing and land use policies, and advocate for racial justice in housing policy.” The group indicated that it is working on a federal fair-housing lawsuit against the city.





    Related Articles

    arrow_forward_ios
    Mayor Bill de Blasio (Getty; Google Maps)

    Inwood rezoning is a done deal

    Inwood rezoning is a done deal
    Joy Construction’s Eli Weiss, Maddd Equities’ Jorge Madruga, and Mayor Bill de Blasio (Google Maps, Getty)

    Inwood rezoning faces new challenges in HPD budget cuts

    Inwood rezoning faces new challenges in HPD budget cuts
    From left: Maddd Equities’ Jorge Madruga, Joy Construction’s Eli Weiss and Mayor Bill de Blasio (Google Maps, Getty)

    Inwood rezoning upheld by court

    Inwood rezoning upheld by court
    The fate of Inwood’s rezoning could take months to play out in New York’s court system. (Google Maps, iStock)

    Inwood rezoning battle could take months. Will developers wait?

    Inwood rezoning battle could take months. Will developers wait?
    Clockwise from top left: Jeff Sutton, Robert Reffkin, Charles Bendit, Toby Moskovits, Jorge Madruga and Ryan Schneider (Credit: Madruga by Owen Hoffmann/Patrick McMullan via Getty Images; Moskovits by Sasha Maslov 

    Juicy lawsuits to watch as courts “virtually” reopen

    Juicy lawsuits to watch as courts “virtually” reopen
    Charles Bendit and Jorge Madruga (Credit: Owen Hoffmann/Patrick McMullan via Getty Images)

    Developers throw support behind city’s effort to reinstate Inwood rezoning

    Developers throw support behind city’s effort to reinstate Inwood rezoning
    From left: Taconic Investment Partners' Charles Bendit,  Maddd Equities' Jorge Madruga and Slate Property Group's David Schwartz

    Developers call Inwood ruling another blow in war against them

    Developers call Inwood ruling another blow in war against them
    Ydanis Rodriguez (Credit: Getty Images)

    Even foes of Inwood rezoning shocked by its reversal

    Even foes of Inwood rezoning shocked by its reversal
    arrow_forward_ios

    The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

    Loading...