Going, going, going…still going.
The rights to develop six towers in Brooklyn are up for grabs. The problem is finding someone who wants them.
At a meeting Tuesday, an advisory committee to the Empire State Development Corporation discussed the fact that no developers have expressed interest in Greenland USA’s development sites at Pacific Park.
Greenland defaulted on $350 million worth of loans tied to six sites. An auction for the development rights has been postponed twice. It is now slated for April 30.
But it doesn’t seem like developers are clamoring to take over. The state will have to sign off on whoever replaces Greenland, and no developer has presented itself to ESD as of yet.
There are a few reasons why this property is a hard sell, aside from the generally hostile environment for ground-up development anywhere. For one, to build housing on the sites, the developer must first build a platform over the railyard. That will be costly and could take years.
Under a 2014 agreement, Greenland or whoever takes over will need to deliver 876 affordable apartments by 2025. Failing to do so will trigger millions of dollars in penalties.
ESD CEO Hope Knight indicated in January that Greenland could get creative and convert some of the completed market-rate apartments to affordable ones to avoid those fines. However, as the Atlantic Yards/Pacific Park Report noted in February, the math does not work because Greenland doesn’t control enough market-rate units at Pacific Park.
It is bananas how little this project gets talked about publicly (especially now that everyone seems focused on housing) and how difficult it is to figure out what the heck is going on. Here are six sites where housing could be built. We’ll keep you posted!
What we’re thinking about: Will Adam Neumann buy back WeWork for $500 million? Send a note to kathryn@therealdeal.com.
A thing we’ve learned: The Independent Budget Office released a report today explaining a periodic theme of my stress dreams: The difference between a tax abatement and exemption. The IBO, noting that lawmakers use these terms interchangeably, modeled out what 421a would look like as an abatement (it is an exemption!). Both are tax breaks, but an exemption reduces the taxable value of a property, while an abatement discounts the final tax bill. In the case of 421a, a property is taxed as if an apartment building hasn’t been constructed on the site.
The report concludes that if 421a were instead an abatement, taxes for one-, two-, and three-unit houses and commercial properties would have been higher, and taxes for non-421a apartment buildings would have been lower. In other words, even if the 421a tax break is the same for buildings that receive it, its structure as an abatement or an exemption affects other properties’ tax burdens differently — and under the old version, rental buildings got screwed.
The governor’s executive budget bill initially refers to her proposal to replace 421a as an abatement, which would be good for non-421a rental buildings, but the actual bill language around the tax break describes an exemption.
Elsewhere in New York…
— More than 700 lawsuits have been filed against the city and its Department of Correction under the Adult Survivors Act by women alleging that they experienced sexual abuse at Rikers Island, Gothamist reports. The plaintiffs are seeking more than $14.7 billion in damages.
— The state Department of Health says that Mount Sinai Beth Israel violated a cease-and-desist order barring it from reducing services while its closure awaits regulatory approval, Politico New York reports. The hospital’s emergency department no longer accepted stroke patients and the hospital stopped outpatient surgeries.
— Gov. Kathy Hochul offered up New York Harbor to receive cargo ships affected by the collapse of the Francis Scott Key Bridge in Baltimore, WABC reports. A container ship lost power and crashed into the 1.6-mile bridge on Tuesday.
Closing Time
Residential: The priciest sale Tuesday was $15.4 million for a sponsor-sale condominium unit at 111 West 57th Street in Midtown.
Commercial: The most expensive commercial closing of the day was $82.6 million for the commercial portion of 146 West 57th Street in Midtown.
New to the Market: The most expensive listing to hit the market Tuesday was a $30 million co-op unit at 960 Fifth Avenue on the Upper East Side. Serena Boardman of Sotheby’s International Realty has the listing.
Breaking Ground: The largest new building filing of the day was an 18,600-square-foot, six-story, mixed-use project at 25-36 31st Street in Astoria. Joseph Sultana Jr. of JLS Designs filed the permits.
Correction: An earlier version of this story conflated the “Miss Brooklyn” site with site 5. Development rights could be transferred from the former to allow development at the latter.