The Real Deal New York

Far from spotlight, but close to major growth

Far Upper East Side to get 1000s of apts. and major science park
By Tom Acitelli | October 01, 2005 01:00PM

Some of the briskest development in Manhattan may soon happen on the far East Side, past First Avenue, in moves that would alter the landscape of a slice of the city not noted for coveted addresses. When the far East Side is considered at all, it’s the sort of address from where one hikes just to buy groceries or a sitdown meal, but plans in place will change that.

At least four residential buildings are either proposed or planned between East 34th and East 42nd streets that could add up to 4,000 apartments. The residential towers would join the few high-rises already there, like the Corinthian on 38th Street, Manhattan Place on First Avenue, and the Horizon just off the FDR Drive.

Star architects Richard Meier and David Childs have been recruited by developer Sheldon Solow to design residential and office buildings, respectively, on a First Avenue site purchased from Con Ed five years ago, the New York Times reported. Both buildings would reportedly rival nearby Trump World Tower in height.

The influx of apartments could either be a boon to the far East Side or be too many apartments at once that will be hard to sell and even rent, especially if they come on after the housing market has cooled. The far East Side doesn’t have the same amenities restaurants, grocery stores, retailers that even the East Side west of Second Avenue has.

“I lived in the Horizon back in the mid and late 1990s,” said Paul Purcell, a former Douglas Elliman president and co-founder of Braddock + Purcell, a residential real estate consultancy. “Interestingly, I felt removed. I felt like I had to get over to Third Avenue for any services. I felt like I lived on a big highway. But now I think it’s changed. Now, you only have to go, like, one block over.”

Retail development, though, may very well follow any major residential, some real estate professionals say, and commercial development, too, should happen concurrently. The United Nations may temporarily relocate within the area, and the East River Science Park, according to information from Community Board 6, will soon go up next to the Bellevue Hospital Center farther south.

The UN relocation is on hold amid political wrangling over the scope of renovations to the world body’s Turtle Bay headquarters as well as the temporary relocation itself.

In early August, however, the city announced that Alexandria Real Estate Equities, a California-based REIT, would develop the East River Science Park into what would become the biggest commercial bioscience center in the five boroughs. The 870,000-square-foot facility, to be built on city-owned land around 30th Street at First Avenue, is expected to create more than 2,000 permanent jobs, according to the city, and 4,000 construction jobs over the next decade. The $700 million cost will be privately financed.

But it’s the residential buildings that would probably have the most impact.

Janice Silver, an executive vice president at Bellmarc, managed her firm’s former First Avenue office on the far East Side. She remembers many years ago seeing buildings like the Corinthian and the Horizon going up east of Second Avenue. “I thought,” she said, “along with everyone else, ‘Wait a minute, these are out of the way.’ At the time, there weren’t that many buildings going up out there.”

The new towers could fetch prices similar to those in the Corinthian or the Horizon, Purcell said, or they could go much lower in a post-boom market. The average sales price in the Horizon this year has been about $856,000 and about $880 a square foot; in Manhattan Place, the averages have been $781,000 and $902 a square foot.

On the First Avenue parcels between 35th and 41st streets once owned by Con Ed, residential buildings and at least one commercial tower, possibly with apartments, are planned. In November 2000, Con Edison announced the sale of the parcels 9.2 acres total to FSM East River Associates, a partnership between Fisher Brothers and Solow Realty & Development.

The sale, at the time, according to Con Ed, was for between $576 million and $680 million. FSM East River Associates had announced intentions to build residential and office towers on the parcels 616 First Avenue between 35th and 36th streets; 685 First Avenue between 39th and 40th streets; 708 First Avenue between 40th and 41st streets; and 700 First Avenue between 38th and 40th streets, the site of Con Ed’s 104-year-old steam electric generating station.

Another commercial tower and residential building, according to the Times, are planned for 41st Street and First Avenue, with the residential building designed by Meier and the commercial tower by Childs. (A representative from Meier’s office told The Real Deal it was too early to comment on the residential building’s specifics.)

Three other residential buildings have been proposed on the former Con Ed parcels, the Times reported, as well as a two-acre public park between 39th and 40th streets with views of the East River and, perhaps ironically, of similarly big construction in Long Island City, Queens.

The plans are reportedly moving forward, with demolition already beginning on some of Solow’s sites, although much could change as the land-use review process gets under way and area residents add input. If all goes forward as planned, the far East Side may become a much busier area, perhaps as envied address-wise as Manhattan west of Second Avenue.

“This will be the last segment to sort of transform that whole stretch,” Purcell said, “into what will be very nice buildings and very residential.”

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