Stalled LIC hotel development site up for sale

Under new city law, Toyoko Inn’s property likely to be residential instead

24-09 Jackson Avenue in Long Island City, Queens (Google Maps, Wikipedia)
24-09 Jackson Avenue in Long Island City, Queens (Google Maps, Wikipedia)

A long-stalled hotel development site in Long Island City is up for sale.

Japan’s Toyoko Inn is aiming to get around $60 million for its property at 24-09 Jackson Avenue in the Court Square section of the Queens neighborhood, sources told The Real Deal.

The next buyer is likely to develop the property into apartments, as Long Island City’s residential market is now much more mature than it was more than a decade ago when Toyoko Inn first made plans to build a hotel.

The company, which operates a chain of more than 200 economy hotels in several countries, assembled the site for more than $26 million between 2007 and 2014. The project never got off the ground, though, and Toyoko Inn has hired a CBRE team led by Dan Kaplan to sell the property.

A representative from Toyoko Inn couldn’t be immediately reached. Kaplan declined to comment.

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Several factors could have influenced Toyoko Inn’s decision to sell.

The City Council in December approved a measure that requires developers to obtain special permits to construct new hotels, a move that all but guarantees hotel developers will have to commit to using union hotel staff on their sites — and compete against nonunion hotels, which have lower labor costs. In areas of the city that had the special permit requirement prior to December, no new hotels have been built under the regulation.

The City Council’s zoning amendment did allow for projects that received construction approval from the Department of Buildings before the vote to be grandfathered, but Toyoko Inn hadn’t received permits for its plan.

Meanwhile, Long Island City — once considered a frontier for new residential developments — has become a desirable neighborhood to live in with strong rental and for-sale markets.

An owner can develop a 267,000-square-foot residential building on the Jackson Avenue site as-of-right.