Don Peebles calls affordable housing “absurd” for 11th Avenue site

State rescinded request for proposals, pulling rug out from under developer

Don Peebles, founder, The Peebles Corporation, along with a rendering of the proposed "Affirmation Tower" (The Peebles Corporation, iStock)
Don Peebles, founder, The Peebles Corporation, along with a rendering of the proposed "Affirmation Tower" (The Peebles Corporation, iStock)

To developer Don Peebles, the state’s decision to halt plans for a West Side development felt like canceling the Super Bowl with his team leading at halftime.

The Peebles Corporation had proposed a 2 million-square-foot skyscraper for the site, 418 11th Avenue. “Affirmation Tower” would have been funded mostly by Black-owned companies, designed by architect Sir David Adjaye, built by minority- and women-owned businesses and included NAACP offices.

With the political environment and positive media stories providing a tailwind, Peebles’ vision of a 1,663-square-foot tower with at least two hotels, office space and an entertainment complex was well positioned to be chosen by the Hochul administration. “Affirmation Tower will be a symbol of Black achievement” declared an Amsterdam News headline in November.

But on Dec. 21, Empire State Development Commissioner Hope Knight rescinded the request for proposals “in light of today’s changed economic environment and in keeping with Governor [Kathy] Hochul’s commitment to building a thriving and equitable New York.” She cited an opportunity to “reassess development priorities and solicit more input from the local community and other stakeholders.”

The state has not specified how it will change the RFP, but community members have called for more affordable housing and Hochul recently added more residential space to a state plan for 10 towers around Penn Station. With so few state-owned development sites available in Manhattan, the governor, who is up for election this year, is facing pressure to include affordable housing at 418 11th Avenue.

The RFP issued by the Cuomo administration allowed for commercial or mixed-use development. Proposals with apartments would need to make 30 percent of them affordable for individuals making an average of 80 percent of the area median income. But that was not the only factor deterring developers from including residential space.

Another was that property tax break 421a expires in June and political consensus on a replacement could be elusive. The last time it lapsed, developers largely stopped proposing new apartment buildings.

Moreover, a commercial building could be larger. A residential project would be limited to a floor area ratio of 12, although the site permits an overall FAR of 24. Hochul has proposed lifting the residential cap in the city, but previous attempts to do so have failed.

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The canceled RFP encouraged “hotel uses that are complementary” to the nearby Javits Convention Center, a sentiment that Peebles supports.

“Affordable housing is not the best use for that site — across the street from the Javits Center is absurd,” he said. “It would be squandering an opportunity to help Javits become more competitive.”

Peebles said Affirmation Tower would be a symbol of the city’s recovery and “proof that economic opportunity is available for everybody including women and people of color in the real estate industry.”

Nayan Parikh, executive director and president of the New York chapter of the National Association of Minority Contractors, agreed that the project would be “a tremendous boost to the MWBE community and to the city’s economy.”

Community Board 4, an advisory body of local volunteers, has made clear that it prefers residential construction on the site, which is between West 35th and West 36th streets.

“We were very pleased that this RFP was pulled back for reconsideration,” said its chairman, Jeffrey LeFrancois. “This site could be a huge boon for housing development that includes a wide band of income spectrum.”

A commercial tower is not a slam dunk. It would be competing for tenants against a plethora of nearby, new class A office space as many companies reassess their space needs. As for the hotel component, Zoom has replaced some business travel, and one developer familiar with the site predicted that demand for hotel rooms from events at Javits likely would not be sufficient, and that other tourists would likely opt to be closer to Penn Station. The 11th Avenue site is a 13-minute walk from the transit hub.

Brookfield, Related Companies, Rockrose Development Corp. and Tishman Speyer also reportedly toured the site, though it is not clear if they planned to submit proposals to the original RFP.