For a time, it seemed like Council member Crystal Hudson would never approve a development — and Ian Bruce Eichner would never build one.
Hudson has made clear that projects in a crucial corridor of her Brooklyn district would have to surmount an extremely high bar to get the rezonings they needed from her. She backed up her tough talk by rejecting a $115 million project that included affordable housing, a day care center and small-scale manufacturing space on a lot vacant for decades.
As for Eichner, a person who shall remain nameless questioned whether The Real Deal should keep identifying him as a developer given that his proposals often don’t pan out. In fairness, his Continuum Company’s website does list 15 projects. But not all actually exist.
For example, 960 Franklin Avenue. Eichner’s website depicts a gleaming tower with 1,600 apartments, half of them “workforce” or “affordable” housing. Seven years after he bought the Crown Heights site, all he has to show for it is an empty lot and a slew of setbacks.
I admit to slapping a sarcastic headline on a July article about the Brooklyn borough president’s recommendation against Continuum’s application: “Bruce Eichner suffers 976th consecutive defeat in Crown Heights.”
As if to prove me right, Eichner last month snatched defeat from the jaws of victory when he balked at the City Planning Commission’s approval of a scaled-down version of the Franklin Avenue project. I had not seen a developer trash a yes vote by the commission since covering my first Ulurp application 32 years ago.
But based on events of the past two days, I now think Eichner and Hudson, the Council member, will prove me wrong and actually get something done at 960 Franklin.
After talking to the unions who would finance, build and operate the 355-unit development, Eichner stepped away from the ledge and proposed a way forward.
Eichner’s land-use attorney, David Rosenberg, and his head of acquisitions, William Wallace IV, told the City Council at a hearing Wednesday that they would accept the commission’s height limits — to minimize shadows cast by the project on the Brooklyn Botanic Garden — if they could choose the “workforce housing” option of the Mandatory Inclusionary Housing law to meet affordability requirements.
For her part, Hudson did not grandstand, pontificate or lecture, as politicians are prone to do at hearings. Instead she asked smart, reasonable questions, including my favorite: “Are you willing to share with us the profit margin you need to pursue this project?”
All Wallace would say is that the profit margin was “extremely tight” and that union pensioners depend on returns from the fund providing the construction loan.
“This is not play money. This is real money,” he said. “If it doesn’t pencil out, we have to withdraw.” (Development is a risky business, and many construction loans end up in default.)
Wallace suggested that the return on investment alone would not justify the risk of lending to the project. Turning his head to the union members filling the hearing room, Wallace said the difference is the union jobs it would create. Without a rezoning, the likely result would be a market-rate condo built and serviced by nonunion workers, as is being built next door.
Hudson also asked how many of the units would be studios, one-bedrooms and two-bedrooms. “If we’re talking about workforce housing, we want to make sure that the unit mix is appropriate,” she said.
That was a huge moment for what has been a star-crossed project. It shows Hudson is willing to consider making more apartments workforce units, which are affordable to the middle class but not to low-wage workers.
Given the need to keep heights low to protect the Garden, and the likelihood of 100 percent market-rate condos if Hudson does not come to terms, it now seems likely that she will.
What we’re thinking about: Who are Floyd Mayweather Jr.’s partners and lenders on his $402 million acquisition of a Black Spruce multifamily portfolio? Send tips to eengquist@therealdeal.com. And if you haven’t heard about the chance meeting with a retail mogul that got Mayweather interested in real estate, Rich Bockmann tells the hilarious tale here.
A thing we’ve learned: The wage requirements in the state’s multifamily development tax break 485x increase construction costs by $50 to $100 per square foot, according to real estate lawyer Joshua Stein.
Elsewhere…
— A reader asked why 52 Fourth Avenue in Boerum Hill, Brooklyn, is still a construction pit nearly a year after the foundation was finished. We emailed the developer, Metropolitan Realty Exemptions, but didn’t hear back. Lots of other housing has been built or is under construction along that corridor. Diagonally across the intersection with Dean Street, for example, a new, mixed-use building at 35 Fourth Avenue (aka 375 Dean Street), with 104 apartments and 8,800 square feet of commercial space, just got an $84 million loan.
— Slate Property Group saw homeless shelters as a way to make money when the pandemic turned the real estate industry on its head. But shelters come with more headaches than a typical property investment. Slate bought a former Hampton Inn at 320 Pearl Street, where the city planned to open a shelter this fall, but parents at the Peck Slip School next door and local residents have been engaged in a frenzied effort to stop it. The PTA voted to give $10,000 to shelter opponents, sparking an investigation by the Department of Education, Hell Gate reported.
— This just in: Unless you’re Donald Trump, it’s hard to raise money for a campaign when you’re indicted. Donations to Mayor Eric Adams have slowed to a trickle, with less than $100,000 going into his legal defense fund in the past three months, the Daily News reported. His legal bills figure to far exceed that. Perhaps that helps explain his request for a speedy trial.
Closing time
Residential: The priciest residential sale Wednesday was $12 million for a 2,640-square-foot condominium at 217 West 57th Street, Gary Barnett’s Central Park Tower. Kane Manera of the Corcoran Group had the listing.
Commercial: The largest commercial sale of the day was $31.5 million for a 170,694-square-foot, mixed-use property at 349 West 139th Street in Central Harlem.
New to the Market: The highest price for a residential property hitting the market was $32.5 million for a 6,760-square-foot condominium unit at Vanke’s 100 East 53rd Street, aka the Selene, in Midtown East. Corcoran Sunshine has the listing.
— Matthew Elo