Battery Park City, often dismissed as a quiet backwater, is seeing an influx of new development.
In an indication of how much the boom market has strained the seams of Manhattan, four major projects are in the works, and the area may be fully built out in the next few years if – and it’s possibly a big if – current conditions hold.
Originally planned in the 1960s as a utopia to give Lower Manhattan a touch of suburbia, Battery Park City was built on a 92-acre landfill on the island’s western periphery. It was never envisioned as one of New York City’s throbbing epicenters.
Brokers who specialize in the neighborhood have been watching it rebound from the aftermath of the 2001 terrorist attacks. Development there has pulses racing among both brokers and potential buyers.
“People that know about this neighborhood really love it,” said Roberta Benzilio, chief operating officer at Century 21 William B. May, who has lived at Battery Park City’s Liberty House for 15 years. “A lot of people I encounter here, even in my building, have been here since the inception.”
This summer, the Battery Park City Authority will seek a developer for the last two sites (23 and 24) in the community of about 9,500 people.
The Albanese Organization recently topped off a 253-unit environmentally-sensitive “green” building called The Verdesian at Site 18B using $100 million worth of Liberty Bonds. The building is expected to be ready for occupancy in January 2006.
Federal Liberty Bonds offered after the terrorist attacks provided tax-free financing for several developers, though they are required to create rental units to use these incentives.
Albanese also built the 293-unit Solaire at 20 River Terrace with $110 million in Liberty Bonds. The green building opened in May 2003 and was fully rented within six months. The Solaire set records in Battery Park City for rental prices, while a new building called Millennium Tower Residences with 236 condominiums aims to set them for sales prices. Brokers are sitting up and taking notice.
“I think this project will fill with families who want to continue to live in Battery Park City, but are sick of renting, or simply want new construction in their old neighborhood,” said Terry Lautin, a neighborhood resident and broker with Prudential Douglas Elliman Real Estate.
Lautin said all three of her buyers at Millennium Tower Residences planned to stay in their apartments with no intention of flipping them for investment. Prices at the project, developed by Millennium Partners, start at $705,000 for a one-bedroom apartment, ranging up to $1.8 million for a four-bedroom apartment.
Other projects will be breaking ground soon. The Sheldrake Group expects to begin construction in September on another green condominium building with about 265 units, many of them large three and four bedrooms.
Brokers who work in Battery Park City have lamented the lack of larger apartments for families. They’ve reported families buying smaller units and combining them, a costly proposition with Battery Park City’s steep maintenance fees, which can reach $4,000 a month.
“Hopefully, we’ll help address some of that pent-up demand for larger apartments,” said Robert Klehammer, executive vice president of The Sheldrake Group. “This is one of the reasons we decided to reduce the number of units and make larger ones.”
Another building going up is the 274-unit Tribeca Green, which also will have larger apartments. About 35 percent of the building was rented by early May and occupancy is expected at the beginning of the summer, said Daria Salusbury, senior vice president for The Related Companies, which is developing the building.
Currently, asking rents for small one bedrooms start at $2,495; bigger one bedrooms start at $2,995; two bedrooms start at $4,895; and three bed-rooms are $7,495.
The last residential site left undeveloped in Battery Park City, besides sites 23 and 24, is site 3 in the southern portion, said Leticia Remauro, vice president of community relations with the Battery Park City Authority. Though the site went out for RFP months ago, a selection of the developer won’t be made before June, she said.
Also a concern is speculation that the investment bank Goldman, Sachs & Co., a major Downtown employer, has put on hold its plans for construction of an 800-foot tower on site 26 in the northern portion of Battery Park City. Remauro said the company was still paying rent on the site as of mid-May.
Foreigners are seeking out Battery Park in abundance, Benzilio said, and young professionals working in the World Financial Center or the Financial District remain a staple of the neighborhood. The high monthly maintenance fees due to the land-lease agreements developers in the community negotiated don’t typically thwart potential residents.
“People who come to Battery Park City know. The Manhattan buyer is very savvy they do their homework on the web sites and know what they’re coming to see,” said Dimitrios Skretas, a broker with Prudential Douglas Elliman who does some work in Battery Park City.
Development of the community has always been market-driven, say brokers. “Some people are scared that it’s a land-lease down here,” Benzilio said. “People aren’t familiar with what land-lease means, though you can find it in other parts of the city.
“The lease is going to expire in 65 to 70 years, but that’s not an issue,” she said. “It will most likely just be renegotiated.”