From the Neighborhood Retail Alliance:
In last week's WSJ, the paper covered the city council vote on Flushing Commons and got the following interesting quote from an ebullient Mike Myer: "In Flushing, the council approved rezoning for Flushing Commons. The $850 million project includes 600 residential units, 185,000 square feet of offices, 235,000 square feet of retail space, 1,600 underground parking spots and a 1.5-acre public green space. In 2005, co-developers Rockefeller Group Development Corp. and TDC Development Corp. won the bid to build on the city-owned site, and have worked since on rezoning and a plan to compensate businesses that will be affected by construction. "It was a Herculean effort," said TDC President Michael Meyer before the vote. "We've gone through two real-estate cycles…Starting tomorrow, we'll go out and look for financing."
So, let's get this straight. The developer was awarded this bid and got city council approval without any guarantee that the project is financible in this current economic climate-and what happens in case of a default? Has EDC built into the disposition any fail/safe provisions that will allow the city to reclaim the property should TDC be unable to fulfill its obligations in a timely manner? But perhaps, the city planning to convey the property to the developer without any strings attached?
Now Mr. Myer, as clever and slippery a character as we have seen-full of false bonhomie- was asked repeatedly during the ULURP process about his organization's fiscal capabilities. And, according to those at the various hearings on the land use application, the ever shifty realtor did what he does best-he shucked and ducked. But that was land use-and now we are going to have to determine the procedures for disposing of the muni lot property-and questions of financial viability should be front and center.
In addition, there is the further potential that the developer will have its funding stream collapse in the middle of construction-after the parking structure is demolished-leaving only a Robert Moses style hole in the ground. Is the city protected in case of this eventuality? Even more so, are the Union Street and other Flushing merchants going to be indemnified-not by the city-but by the developer should this kind of parking disaster occur?
And what ever happened to the 17 stipulations that CB #7-and the Queens BP promulgated? Well, one thing we know for sure is that they have been disappeared in the course of the land use review. How do these entities feel about being totally ignored-after being used as "supporters" of Flushing Commons?" And, since they will be central to the borough board process, will they be looking to amend the disposition agreement to incorporate some of the stips that were agreed to?
And over at Sky View Parc...
From the NY Post:
The developer of the mam moth, $1 billion-plus Sky View Parc condo-retail complex in downtown Flushing is scrambling to borrow nearly $150 million so it can complete the first phase of the project -- drastically overbudget and behind schedule.
Sky View Parc was conceived as something new in Queens: a luxurious, 1,000-unit residential enclave designed to exploit Flushing's status as a thriving center of Asian and Asian-American life. Residents would enjoy a private elevated park and pool, and shoppers would flock to 795,000 square feet of big-box type stores.
But according to a summary for participants in a senior lenders' meeting on June 16, "total cost overruns" on Sky View Parc, which started work in 2007, were $160,802,000 as of last December -- compared to the original budget for the project's first phase, which a source estimated at $600 million.
Now, the project's general partner, Onex Real Estate Partners, is seeking to restructure a $519.3 million construction loan to extend the term by three years and to borrow an additional $144.6 million.
So far, several lenders have not yet agreed to a restructuring plan by Eurohypo Bank AG and Wells Fargo. While the original loan might have been exhausted, work continues, thanks to equity Onex pumped in -- but long-term restructuring is deemed critical.