The demise of Innovation QNS, a planned $2 billion development allowed by a City Council rezoning in November 2022, drew a nasty response from the local Council member.
Astoria’s Julie Won released a statement that was one part anger, one part threat and one part “I told you so.” None of the parts made sense, although they might seem logical to someone who does not understand how development works.
Won said the project had “no political support.” But Won herself voted for it, and the rezoning passed 46-1. Mayor Eric Adams and Queens Borough President Donovan Richards backed it as well.
Won also said, “The remaining partners who are moving forward with a portion of Innovation Queens and those who will purchase other parcels of the land to benefit from this ill-fated rezoning are still expected to fulfill the same community benefit obligations.”
Ill-fated? The rezoning was approved. I call that success.
Perhaps Won was referring to the fate of the rezoned area, which allows for about 3,200 new homes.
Nothing has been built yet, but if multifamily projects on these sites pencil out, they will happen. If not, two reasons would be the city’s affordability requirements and the state’s property tax regime.
The government also controls other levers that determine the viability of housing development. Take the scaffold law, which only exists in New York and makes insurance for projects more expensive. (Business groups on Thursday launched a new effort to repeal the law — see “Elsewhere,” below — but many previous attempts have failed.)
Other factors that can doom projects, such as high borrowing costs, are beyond New York’s control. But they are certainly not the fault of developers.
Won concluded her statement with this: “The Astoria community is ready to keep landlords accountable and those who don’t respect community agreements will be met with severe backlash.”
Whatever benefits Won wanted, she should have included in the language of the rezoning. But the enforceability of some elements of community benefits agreements has long been an unresolved debate among land-use lawyers. As for the additional low-income housing she demanded, that was always going to require public subsidies.
The Council member, like too many people, seems to treat rezonings as a benefit bestowed on real estate that obliges the industry to give something back. That’s the wrong way to think about them.
Zoning reflects what the government wants to be built. The city wanted more housing in Astoria, and rezoned to allow it. If it doesn’t get built, the city and state can take steps to make it financially viable.
If the rezoning for Innovation QNS were a pot of gold for developers, Silverstein Properties would not have pulled out. The firm’s decision suggests that building apartments on the government’s terms carried too much risk for the firm. (Megaprojects also require a lot of work, and Silverstein has other fish to fry.)
If the Astoria parcels are built out, the risk will be borne by developers, investors and lenders. Not by Julie Won.
What we’re thinking about: At least one landlord besides the one we wrote about last week applied this year for the state’s hardship program for owners of rent-stabilized housing. The application involved “hours and hours of work,” the landlord said by email, but several months have since passed and he has yet to hear back from the Division of Homes and Community Renewal. The landlord added that he is “not holding my breath.” If you’d like to share any experiences you’ve had with DHCR, email me at eengquist@therealdeal.com.
A thing we’ve learned: Silverstein Properties’ abandonment of Astoria megaproject Innovation QNS was evident as far back as July 2023, when it quietly terminated its 2019 contract to buy 42-11 Northern Boulevard from Premier Equities, the firm co-founded by Uzi Ben Abraham and Yaron Jacobi. Abraham Jacobi signed the termination agreement on behalf of Premier.
The parcel, which is in an Opportunity Zone and was just put back on the market, was given a floor-area ratio of 9 by the 2022 rezoning for Innovation QNS, allowing for a 219,000-square-foot multifamily or mixed-use building. The site has a one-story retail building formerly leased to Harley-Davidson, which closed its dealership and service center there 11 months ago.
Premier took out a $27 million mortgage on the property in late 2021 from Signature Bank, which later folded. The FDIC took over the loan and sold it to Blackstone, property records indicate.
Elsewhere…
— A coalition of business and civic groups is backing a bill from Rep. Nick Langworthy that would strip federal funding from any project that’s held to New York’s 140-year-old scaffold law, according to the Times Union. The congressional bill aims to pressure the state legislature to scrap the law, which has survived numerous repeal efforts thanks to support from construction unions and trial lawyers.
— Manhattan Council member Christopher Marte has launched a bid to become the next Council speaker, PIX11 reported. Marte unveiled a website outlining ideas for reforming the Council, including more transparency for the chamber. Other contenders include Amanda Farías of the Bronx, Crystal Hudson of Brooklyn and Julie Menin of Manhattan.
— A new analysis warns the soon-to-be-chosen downstate casinos may cause a sharp decrease in business for other New York gambling venues, Gothamist reported. The report, by New Hampshire-based Capacity Consulting for Sullivan County, estimated that Resorts World Catskills would lose 26 percent of its gaming revenue from one new casino in the New York City area and up to 76 percent when three are operating.
— Quinn Waller
Closing time
Residential: The top residential deal recorded Thursday was $12 million for a 2,436-square-foot, sponsor-sale condominium unit at The Surrey, 20 East 76th Street in Lenox Hill. Lauren Muss and Michelle Griffith of Douglas Elliman had the listing.
Commercial: The top commercial deal recorded was $9.4 million for a 32,010-square-foot, 24-unit apartment building at 3450 Broadway in Hamilton Heights.
New to the Market: The highest price for a residential property hitting the market was $28.9 million for a 6,600-square-foot condominium unit at 345 West 13th Street in Greenwich Village. Kelly Killoren Bensimon of Douglas Elliman has the listing. The property last sold for $2.7 million in 2005.
— Matthew Elo
