“There’s never a development project that’s embraced.”
So says David Kramer, president of the Hudson Companies, one of the city’s largest affordable housing developers, in this month’s Closing interview.
Kramer was talking about opposition to a project his firm is working on in Brooklyn Heights (One Clinton), which includes rebuilding a public library at the base of a new luxury condo tower.
The sentiment applies pretty broadly. If you build anything, anywhere, you are always going to have someone who doesn’t like it because of aesthetics or economic inequality or traffic or, simply, because many people don’t want change. New York’s political climate, meanwhile, has turned sharply against real estate — and being a developer in the city has become a pretty thankless job (financial gains aside).
But seeing thousands of workers construct the country’s largest private real estate project, it’s hard not to have more respect for how the city gets built.
The Real Deal’s New York office sits directly across the street from Hudson Yards. So we’ve had a front-row seat over the past two and a half years since we moved in, watching Related’s new towers and giant mall take shape. It’s been a 15-year process since the area was rezoned to make way for the biggest single development in the city since Rockefeller Center was built during the Depression.
Whatever the project’s shortcomings, if you are Related Chairman Steve Ross and you spend that many years creating an entirely new neighborhood in Manhattan, and you’re snubbed by the mayor and governor (who didn’t show up for the opening), panned by the New York Times’ architecture critic and attacked by the unions with chants of “Fuck Steve Ross” and “We just punched Related in the face” (the standoff ended just days before the debut), it has to sting a bit.
“Building Hudson Yards is the most humbling experience of my lifetime,” Ross said at the opening.
Perhaps the money makes up for that, since he now has a $7.7 billion fortune, according to Forbes.
It’s a given that developers put up towers with the idea of creating space that people can use to live, work, shop or otherwise occupy. But what happens when that’s not the case, if the results are more akin to “if you build it, they won’t come”?
In our cover story this month, we take a deep dive into Manhattan’s so-called “ghost towers” — condo buildings where most of the units are owned by investors, with few full-time residents. There’s growing backlash from critics who say these towers are devoid of life and harmful to the city’s social fabric, and that they are just a parking spot for money, often from abroad.
Some 60 percent of residences in a 14-block area of Midtown East between 49th and 56th streets were “seasonally vacant,” per recent Census data, and the number of pieds-à-terre in the city jumped to 75,000 from 55,000 between 2014 and 2017. A close look at buyer LLCs and apartments eligible for a primary-residence tax abatement helped our reporters paint a picture of just how many of these units there are, and what it means for the city.
Their analysis comes amid the recent push to impose a hefty tax on part-time residents in New York’s luxury market — a move that many in real estate say would have a huge negative impact on prices.
Elsewhere in the issue, we have a story on the growing number of industry players who see cannabis as the next big thing, and a piece out of our Chicago bureau on the prominent Trump tower that’s become the Windy City’s biggest retail failure after a decade-long vacancy there set a Downtown record.
Finally, check out our ranking of NYC’s top lenders for luxury homes and our annual tally of the top office leasing brokerages. There are expanded versions of these lists online, if you sign up for a TRD subscription.
Enjoy the issue!