Government briefs

City inks Coney Island deal with Joseph Sitt

After months of acrimonious negotiations, the Bloomberg administration agreed to pay developer Joseph Sitt $95.7 million for seven acres of land on Coney Island. Sitt, CEO of Thor Equities, had been locked in a stalemate with city officials over how to best develop the stretch of land. Since he began buying up land there in 2005, many of Sitt’s development plans, including a $1.5 billion Las Vegas-style resort, have yet to be built. Sitt will scale back his mega-project to adjacent parcels that weren’t sold to the city and which he still owns. “We have to redo all of our plans, but we will still have millions of square feet of apartments and hotels and retail and restaurants and enclosed amusements,” Sitt said in a Q & A with The Real Deal last month. “The latter versions of the renderings are close to what it will be.”

Chelsea tenants file Stuy Town-style suit

When the state’s highest court ruled in October that the owners of Stuyvesant Town and Peter Cooper Village had illegally raised rents for tenants whose apartments should have been rent stabilized, the case was widely expected to have far-reaching effects on city housing policy. At London Terrace Gardens in Chelsea, a group of 10 rent-regulated buildings, the complex’s owners are already feeling the impact of Stuy Town’s ruling. Eleven tenants there filed suit against their landlord last month in New York State Supreme Court, Crain’s reported. They charge that the landlord, a group of families who have owned the complex since the 1920s, did not re-regulate their apartment rents even after receiving a city tax abatement for renovations in 2003. As many as 300 units could be affected, according to the class action suit.

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As FHA overcomes financial hurdles, city developers breathe easier

With the Federal Housing Administration struggling to meet its reserve fund regulations, city developers were holding their breath, hoping that the organization, which allows apartment buyers to put as little as 3.5 percent down, would continue to back loans. The organization’s troubles have shed new light on the importance of the FHA, which some developers say has become integral to the financial security of the condo business. “If you asked me about the FHA a few years ago, I would have looked at you funny,” David Kramer, principal of the Hudson Companies, the developer of FHA-approved condominium Third + Bond in Carroll Gardens, said. “Now we have gotten involved in making sure that as many financing options as possible are available for buyers, and that is where the FHA comes into play.” In the wake of the FHA’s financial woes, regulators have chosen to actually loosen standards, with condos needing just 30 percent of units presold, as opposed to 50 percent, to qualify for FHA financing effective Dec. 7.

City sees rise in stalled construction sites

The number of stalled construction projects continues to mount, as the most recent set of Department of Buildings statistics shows a 42 percent increase in Brooklyn sites and a 40 percent rise in Manhattan sites since the summer. Brooklyn is home to 245 stalled developments, which comprise almost half of the department’s citywide 527-building list. Of those, 80 are in Greenpoint and Williamsburg. Manhattan has 81 projects that sit unfinished. Staten Island has 33, more than double the number recorded this summer, and Queens now has 144, a 6 percent rise. A City Council bill in October provided developers with incentives to keep their stalled sites safe while waiting for the funds necessary to continue with their projects.