As politicians, Olympic officials and sports team owners scrambled to keep the political football that was the proposed West Side stadium from deflating, Donald Trump pulled off a $1.8 billion deal that took second place in the headlines, but could have a more profound and immediate impact on the development of the Hudson River waterfront.
The city’s largest-ever residential land sale saw Trump and a Chinese investment consortium sign the 77-acre property over to a partnership between the private equity powerhouse the Carlyle Group and the Extell Development Corporation, developer of the 60-story Orion tower on 42nd Street and the owner of the W Hotel in Times Square. It dwarfs last year’s sale of the Mayflower Hotel site at 15 Central Park West, which sold for around $400 million, and was the previous record price for a residential development site in Manhattan.
Trump reportedly made more than $1 billion on the sale, according to published reports.
As Extell assumes a vastly higher profile with its role in transforming the property, real estate observers and activists were quick to point out the significance of the site, which runs, in parts, from West End Avenue to the Hudson River from 59th Street to 72nd Street, saying it could alter the makeup of the Upper West Side.
“I think that with the stadium theoretically not in the works any more, it again becomes the only viable piece of waterfront in Manhattan. Really, it has intrinsic value that cannot be calculated,” said Jim Gricar, an executive vice president at Brown Harris Stevens and residential sales director of its West Side office.
The property is around one-quarter the size of the rezoned Hudson Yards, and the new owners plan to build at least eight additional apartment buildings on the site. If the industrial portion of the land is rezoned, there could be even more residential development, according to reports.
Gricar thinks the site has been given fresh possibilities. “I think that by having a new developer on the site, it will open the site to a new set of buyers who may not have been interested in the site before,” he said. “I think you know what I’m saying.”
Extell and Carlyle didn’t return calls seeking comment on their plans for their purchase, which didn’t include Trump’s Riverside South condo towers north of 66th Street, which have 967 units.
Trump acquired the land more than 30 years ago, sold it, repurchased it in 1982, and took a $300 million mortgage on it in 1994 for $82 million thus the investment partners, who are represented in New York by Paul Davis, CEO of Hudson Waterfront Associates, the Riverside South development company formed by Trump and his partners. (Davis did not return calls for this story.)
Opposition from nearby residents stymied development, and much of the land remains undeveloped, including a proposed 21-acre public park. Property values have skyrocketed in the neighborhood west of West End Avenue, and it remains the largest tract of undeveloped land in Manhattan.
“The amount of property [Trump] sold, you’re not going to find that elsewhere on the Upper West Side,” said Michael Goldenberg, executive director of sales on the West Side for Halstead. “And that’s why he bought it.”
Land is valuable because Manhattan isn’t making any more of it, and perhaps a better capitalized developer can turn the empty lot into another Gold Coast. (Equity Residential, a Chicago firm, is in contract to buy the three buildings in the deal for $816 million as of late June.)
“There are developers who believe they can make a profit on a $1.8 billion purchase,” Goldenberg said. “It’s clear they believe the Upper West Side is worth it.”