My colleague Kathryn Brenzel wrote an intriguing article about the Meatpacking District RFP, in which the city sought an “emerging developer” but did not choose one.
Instead, the Economic Development Corporation selected a bid by Douglaston Development — a very experienced firm — and “emerging developer” David Himmel, a former COO at the big real estate company Jamestown and scion of a prominent real estate family.
Alicia Glen, the former deputy mayor, said as a feminist she found the decision “appalling and disgraceful.”
Glen is absolutely right that this was a missed opportunity for the city to help a female developer. But it’s worth mentioning that the city had another priority: to create as much affordable housing as possible. For that, it tapped a proposal from an experienced team with ample access to capital.
The city and state often have various goals for their projects — low rent, community benefits, MWBE firms, union labor and more. Some are at odds with each other, and it’s impossible to fulfill them all while also choosing a viable bid. The Meatpacking RFP for the former Gansevoort Meat Market site was a classic example.
One real estate professional told me soon after the RFP was issued that it looked like a challenging project, because of the affordability required and other factors, even though the city was offering a free 99-year lease for the land.
The winning bid will set aside up to 55 percent of the apartments as affordable and use no subsidy beyond the standard 485x, which requires high wages for construction workers. And it comes from Jeff Levine’s Douglaston, which has 40 years of experience, and the well-credentialed Himmel.
Nothing in development is guaranteed, but Douglaston and Himmel are more likely to be able to raise the necessary capital and bring the project to fruition than a less experienced, less connected builder, and probably offer more affordability, too.
Himmel obviously doesn’t look like an emerging developer. And it’s not great optics that EDC president and CEO Andrew Kimball also worked at Jamestown. But the families who win housing lotteries for the affordable units are not going to care.
What we’re thinking about: Where will Andrew Kimball go when Zohran Mamdani becomes mayor? Whom will Mamdani pick to run the Economic Development Corporation? Send thoughts to eengquist@therealdeal.com.
A thing we’ve learned: Under a law just signed by Gov. Kathy Hochul, landlords can no longer make a profit on a bounced-check fee passed on to a tenant. There is one exception: A landlord can still charge at least $20, even if the bank fee is less than that amount.
Elsewhere…
Last week, we were thinking about how Blackstone could be taking a heavy loss on a $1.8 billion portfolio of senior housing, an asset class experiencing a “strong rebound,” according to Baker Tilly, and the population is aging.
A reader responded by pointing out three factors that can make senior housing complicated to operate:
- It has a lot of move-outs (including deaths)
- In recessions or other times when it’s hard for seniors to sell their homes, fewer can afford to move into senior housing
- People are staying in their homes longer than they used to, in part because of property tax discounts, and thus moving into senior housing later, which means shorter stays
One thing I know from experience is that even if moving into senior housing (or a doorman building) makes perfect sense, many older people will remain in houses and communities not conducive to aging in place. But that has always been true.
Closing time
Residential: The top residential deal recorded Tuesday was $13 million for a four-bedroom co-op at 1050 Fifth Avenue in Carnegie Hill. Anne Z Easton with Douglas Elliman had the listing.
Commercial: The top commercial deal recorded was $160 million for 346 Madison Avenue and 11 East 44th Street near Grand Central Terminal. Claudio Del Vecchio sold the two properties to SL Green.
New to the Market: The highest price for a residential property hitting the market was $12.25 million for a 3,161-square-foot condominium unit at The Westbury, 15 East 69th Street in Lenox Hill. Anthony Pike of Douglas Elliman has the listing.
Breaking Ground: The largest new building permit filed was for a proposed 37,360-square-foot, 12-story, 48-unit residential project at 2790 Creston Avenue in Fordham. Anthony Ng filed the permit on behalf of Long G Lin.
— Matthew Elo
