Welcome to the Monday edition of the Real Estate newsletter. We’ll look ahead at what’s coming up this week, and take a look back at what you might have missed.
A controversial rezoning proposal in Harlem is slated to come up for a City Planning Commission vote on Monday, after which it is expected to advance to the City Council for review.
The proposal, known as One45, would yield two new towers with upwards of 900 apartments to the area, as many as 282 of them income-restricted for low- and middle-income households. If given the green light by the 11-member commission, it’ll face a difficult path to approval by the Council given opposition from local member Kristin Richardson Jordan, who has rallied against the project, saying it would bring “unaffordable luxury living for the privileged few. ”
The Council typically defers to local members on land use proposals, but the body has expressed some willingness to buck this tradition – one notable recent example being the Blood Center rezoning last year, which the Council approved over local Council Member Ben Kallos’ objections. But getting the plan over the finish line without Richardson Jordan’s support will be challenging.
The development team has highlighted the inclusion of a new Museum of Civil Rights in the plans – an effort co-chaired by the Rev. Al Sharpton and Jonathan Lippman – as well as a new headquarters for Sharpton’s National Action Network. Sharpton could be a powerful ally in getting Council members on board with the project, but his involvement has been called into question in recent weeks: developer Don Peebles told the Commercial Observer last month the museum was actually coming to a project he’s looking to build in Hell’s Kitchen.
The developer behind the Harlem proposal has disputed this. Bruce Teitelbaum, who is also on the museum board, said in a letter to planning commissioners last month that Sharpton and other board members “have categorically denied” that there’s a deal between the museum and Peebles. A representative for Sharpton did not return a request for comment.
Nonetheless, the museum’s planned inclusion appears less set in stone than it was framed earlier this year. The letter from Teitelbaum said the development team is “continuing to negotiate in good faith for a lease of space in One45 to the museum” and are “hopeful that we will soon have completed these negotiations.” The One45 website previously included both the Museum of Civil Rights and the new National Action Network headquarters on a page describing the project, but does not currently mention them.
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SHELTER SKELTER – Adams announces ‘largest’ city investment in beds for homeless, by POLITICO’s Danielle Muoio Dunn: Mayor Eric Adams said he will open up more than 1,000 new beds for individuals experiencing homelessness, calling it “the largest” such investment “in the city’s history.” Adams said the $ 171 million he’s adding to the budget will fund 1,400 new beds by mid-2023, bringing the city’s total to 4,000 beds. The funding is specifically for low-barrier programs, such as stabilization beds and Safe Havens, which provide supportive housing for homeless individuals who do not make use of traditional shelters. “This is not a one and done,” Adams said at a Sunday press conference in City Hall. “This is baseline that every year, this is going to happen.”
Adams has emphasized quality-of-lifeand public safety issues since taking office in January. A series of high-profile attacks by mentally ill individuals in the subway system has highlighted the challenges he faces in pursuing that agenda. He has implemented frequent sweeps of the subway system to remove individuals sleeping on the trains and platforms. And he has had the NYPD clear makeshift encampments set up by individuals experiencing homelessness – an effort that has drawn criticism. Adams has defended the sweeps, saying that they’re being done with care. His administration said in April that the number of people living underground who have accepted services grew from 22 to 300 within six weeks.
TAX TALKS – “City Council eyes big tax cut to help hotels, tourism rebound from pandemic,” by New York Post’s Carl Campanile: “The New York City Council is so concerned about the sluggish recovery of the Big Apple’s $ 100 billion tourism market from COVID-19 that it’s considering dramatically slashing the local hotel tax to spur a faster rebound, The Post has learned. The Hotel Association of New York City is urging Mayor Eric Adams and the council to lower the occupancy tax rate on hotel room stays from 5.875% to 2.875%. The hotel occupancy tax is expected to generate $ 255 million in revenue for city officers for the fiscal year ending June 30, according to the mayor’s preliminary budget plan. But studies suggest the city’s tourism market won’t fully bounce back to 2019 pre-pandemic levels of business until 2026. ‘We have the hotel occupancy tax so high. I definitely think the tax burden is too steep, ‘said Councilwoman Amanda Farias (D-Bronx), chairwoman of the legislature’s economic development committee. “
RETAIL WOES – “Can NYC Help Small Businesses Help Themselves?” by THE CITY’s Greg David: In March, Mayor Eric Adams announced a sprawling ‘Rebuild, Renew, Reinvent’ economic plan, which he called a blueprint for the city’s economic recovery. But with the exception of a speech at the Federal Reserve Bank of New York by Andrew Kimball, the new head of the EDC, administration officials have had little more to say about their plans. ‘The blueprint is a bold, comprehensive, five-borough plan with over 70 initiatives that aim to accelerate the return to pre-pandemic employment while simultaneously laying the foundation of the city’s economic future,’ Kimball declared then. To test that proposition, THE CITY spoke with small business owners about what they need from the Adams administration and compared those needs to what’s in the plan. ”
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STANDING STRONG – “Chinatown’s Civic Groups Have Held Developers at Bay. Can They Survive? ” by The New York Times’ Elaine Chen and Stefanos Chen: “For decades, the Lee Family Association, one of the oldest civic groups in Manhattan’s Chinatown, has helped countless Chinese immigrants, working from its six-story building on Mott Street. Its latest campaign: a makeover, starting with moving the mahjong tables. Ough Though demographic changes in Chinatown have thinned the clubs’ membership, they remain one of the last bulwarks against gentrification in an area of Lower Manhattan surrounded by luxury development. The New York Times identified at least 42 buildings owned by dozens of associations – a collection of commercial walk-ups and tenement buildings that are home to scores of small businesses and hundreds of rent-stabilized tenants. In total they are worth at least $ 93 million, according to city estimates, but perhaps two or three times as much on the open market. While many groups have held on to their property for decades, the pandemic has heightened challenges, with rising taxes, unpaid rent and mounting maintenance costs that could force owners to sell – and upend a delicate neighborhood balance. ”
LAW AND DISORDER – “Queens developer accused of using foreign investment funds to buy three Long Island mansions,” by Crain’s Natalie Sachmechi: Queens developer Richard Xia is being investigated by the Securities and Exchange Commission for allegedly defrauding EB-5 investors in a Queens development project. The case now includes three Long Island mansions he allegedly purchased with their money, according to documents filed earlier this month in federal court in the Eastern District of New York. To raise the cash to purchase the properties, Xia used investor assets as collateral to secure three loans totaling nearly $ 30 million, the SEC claims in court papers. The investors, as part of the federal EB-5 program, invest in job-producing US real estate projects in exchange for a green card. In September the SEC obtained an asset freeze against Xia and his company, Fleet New York Metropolitan Regional Center, for allegedly committing securities fraud in connection with two real estate projects in Queens. ”
BIG DEAL – “Windows shopping: Nightingale offering SoHo building leased by Microsoft,” by The Real Deal staff: “Technically, it’s a chance to be Microsoft’s landlord. Nightingale Properties, led by Elie Schwartz and Simon Singer, is offering the SoHo building it has leased entirely to the tech behemoth founded by Bill Gates. Bids on the property, which features 63,000 square feet of office space atop 18,000 square feet of vacant retail space at 300 Lafayette Street, are expected to come in at $ 200 million – or about $ 2,444 a square foot, according to a report by the Green website Street. A Newmark team led by Brett Siegel and Evan Layne is handling the sale. Microsoft signed a long-term lease on the building’s office space in 2019 – one that has 13 years remaining, according to the website. ”
– “Soho penthouse scores record price for non-doorman building,” by Crain’s Sasha Jones
– “The Willoughby Completes Construction At 196 Willoughby Street In Downtown Brooklyn,” by YIMBY’s Michael Young
– “Deals of the Day: April 22,” by Crain’s Beth Treffeisen and Natalie Sachmechi