What do you call $1.9 billion in the world of public infrastructure projects? A down payment.
That’s a lot of money for less than 20 percent down. But unlike private developers, the Port Authority of New York and New Jersey doesn’t have to sweet-talk investors to raise capital (although it does issue bonds). Instead, the agency said Tuesday, it got approval for a $1.9 billion loan funded by a transportation infrastructure bill, TIFIA, signed by President Bill Clinton in 1998.
It will use the money toward the replacement of the ancient, awful Port Authority Bus Terminal at 625 Eighth Avenue. The project budget is $10 billion, which sounds like a lot but will likely be far less than the ultimate cost, if the history of public transportation megaprojects is any indication.
I would add that $10 billion is the same price tag that was bandied about five years ago. Does that seem realistic? Just about everything costs more than it did a few years ago, except for Compass stock.
(Sorry, that was a cheap shot. Lots of real estate stocks have plummeted. But for the record, Compass fell 73 percent while the Dow Jones Real Estate Index dipped just 1 percent.)
Back to the bus terminal, which opened in 1950. Talk of modernizing or replacing it goes back decades. The hulking edifice has been described by comedian John Oliver as “the single worst place on Planet Earth,” and that was probably generous.
The replacement project should have begun long ago, but — and this will come as a shock — people raised objections to earlier versions of the plan. One was nixed because it would have required seizing land by eminent domain if private owners refused to sell.
Did the Port Authority have to listen to West Side leaders such as Rep. Jerry Nadler? Technically, no. It didn’t listen to Nadler when it sold the Red Hook container port to the city. But that deal wasn’t at risk of being delayed for years by lawsuits, which an unpopular West Side project would be. (Note: Nadler’s influence did contribute to the agency’s taking at least 11 years to unload the property.)
I don’t mean to downplay the complexity of the bus terminal project. The Port Authority is trying to placate West Side elected officials and residents, two governors, and bus riders, who don’t want their service interrupted.
It also wants to be able to bus people in without sending empty buses back to New Jersey, and then back to Midtown, for lack of space to park them. And it needs to future-proof the complex as best as possible, which means predicting how people will commute (or not) decades from now.
All I can say is, Godspeed.
What we’re thinking about: Since the City Council in June 2021 mandated racial impact studies for prospective rezonings, have the studies changed anything besides adding another expense and layer of regulation to housing construction? Send your thoughts to eengquist@therealdeal.com.
A thing we’ve learned: Until 1970, when the New York Post moved to its famous headquarters at 210 South Street, the paper was based at 75 West Street, where legendary Post owner Dorothy Schiff had a 15th-floor penthouse office. The West Street building is now a luxury rental known as Post Towers. A one-bedroom apartment was recently listed for $5,000 and a two-bedroom for $6,150.
Elsewhere…
RXR and TF Cornerstone, partners on the 175 Park Avenue project, plan to apply for up to $4.84 billion in low-cost transportation financing from the Trump administration for their $6 billion supertall, Business Insider reported.
My guess is that if they get anything from that funding stream, it would be closer to $550 million, which is how much they expect to spend on transportation improvements. (The site is connected to Grand Central Terminal.)
Business Insider cited several good reasons for why the developers have not secured private financing for 175 Park, but omitted an important one: They don’t have an anchor tenant.
With a New York City law now limiting criminal background checks of co-op applicants, many companies that perform these checks are letting co-op boards check a box to exclude from the results any history that co-op boards cannot legally consider.
Boards don’t have to check the box, however. They can still see felony convictions from more than five years ago, for example, as long as they don’t let those convictions affect their decision.
But, despite what Yoda said, it’s impossible to unlearn what you have learned. Attorney Julie Schechter, a Fox Rothschild partner in the firm’s co-op and condo practice, said in an interview that she advises boards to check the box.
Real estate firms with a lot of co-op clients sent them advisories about how to implement the new Fair Chance for Housing Act, which took effect this month. Schechter’s was among them.
“We still get a million questions anyway,” she noted, “which is good for business, so I can’t complain.”
Closing time
Residential: The priciest residential sale Tuesday was $9.4 million for a 3,917-square-foot condominium at 1 West End Avenue in Lincoln Square. Jennifer Kalish of Douglas Elliman had the listing.
Commercial: The most expensive commercial closing of the day was $25.4 million for an 8,920-square-foot retail property at 73 Wooster Street in Soho. Epik UK sold the property to an LLC tied to Acadia Realty Trust.
New to the Market: The highest price for a residential property hitting the market was $29 million for a 7,000-square-foot triplex at 1110 Park Avenue in Carnegie Hill. Eva Penson of Sotheby’s International Realty has the listing.
— Matthew Elo