Midtown firm takes title to stalled $51M LIC apartment project

Simon Development expects to open 130-unit rental in July

Landlord and builder Simon Development Group took ownership of a 130-unit residential project in Long Island City, following a foreclosure on the $51 million note. Simon Development, based in Midtown, acquired the Crescent Club at 41-17 Crescent Street on March 16, according to city property records published today. Simon bought the defaulted mortgage note from Citibank in July 2011.

The original developer, NCF Equities, lost control of the property — originally conceived as a condominium — in 2011 and last month Simon Development won the property at a Queens foreclosure auction.

Simon, which plans to rent out the apartments in the building rather than sell them, has hired the Marketing Directors as the exclusive rental agent. Colliers International was hired to lease two retail spaces in the building. The rental units are expected to hit the market in July.

Larry Ross and Joshua Goldflam, both managing principals at investment sales firm Highcap Group, brokered the sale of the Crescent Street note from Citibank to Simon Development.

The sale is at least the third major transfer of a development site on the north side of Queens Plaza in the past six months, in a neighborhood that is now home to the city’s Department of Health and Mental Hygiene and the airline Jet Blue.

“I think what you are seeing is price discovery in Long Island City,” said Franklin Zuckerbrot, president of Long Island City-based Sholom & Zuckerbrot Realty, who was not involved in the transaction. “A number of projects that were stalled are being dusted off.”

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Construction on the 17-story Crescent Club is about 85 percent complete, said Jonathan Simon, president and CEO of Simon Development. Simon, which owns about 600 apartments in Manhattan, Brooklyn and Queens, partnered with the private equity firm Meadow Partners to buy the property.

The Crescent Club has studios and one-, two- and three-bedrooms.

“It’s a great location,” Simon said. “It’s a two-minute walk to the subway.”

He added that because the building was originally a condo, it has higher-end finishes than most city rentals.

“It was built as a condo, so we are offering a rental with condo finishes,” he said. “It’s a great opportunity and a great basis for us.”

Other recent Long Island City transactions include World-Wide Holdings’ purchase of a vacant development site at 41-50 24th Street for $28.85 million Feb. 28. Queens developer Steve Cheung paid $8.3 million for a vacant site at 29-37 41st Avenue in October 2011.