Bickering over Skyview Parc

From the NY Post:

Muss Development, a joint-venture partner with Onex Real Estate Partners, is putting giant Sky View’s unbuilt, second residential phase up for sale.

Muss is expected to put out a formal offering this week via Massey Knakal for development rights to Sky View Parc’s second trio of condo towers. The three additional towers, totaling 650,000 square feet, are planned to rise atop the complex’s 800,000 square-foot Skyview Center retail base, which is nearly 100 percent leased to stores including Nordstrom Rack, Marshall’s, Target and Best Buy.

“We have been retained by Muss to sell development rights to Phase 2,” Massey Knakal principal Robert Knakal told us.

However, Muss’ move seemed to take its partner by surprise.

Onex Real Estate Partners CEO Michael S. Dana, in consultation with his lawyer, Fried Frank real estate Chairman Jonathan Mechanic, told us: “Phase 1 turned out to be a tremendous success. We’re 100 percent committed to Flushing and to the second phase. We believe it will be even more successful than Phase 1.”

Dana said due to confidentiality rules, he could not comment on Muss’ action. But, “Onex is committed to proceeding to build phase 2” and hoped to begin construction in November.

Whatever’s going on between the partners, the Muss move is the latest twist in the project’s long and complicated history.

FEMA settles down in Forest Hills

From The Real Deal:

The Federal Emergency Management Agency has inked a 200,000-square-foot lease at Forest Hills Tower in Queens for its New York City headquarters, according to a release from Muss Development, the landlord of the property. The lease encompasses 10 full floors that will be used by FEMA for administrative office space.

The lease spans the next several months, as the area recovers from the devastation left by Hurricane Sandy, and has options for short-term extensions. The financial terms of the deal were not mentioned.

Fannie Mae ❤ SkyView Parc

From Crains:

The massive Sky View Parc condominium development in Flushing, Queens, has received a key thumbs up from Fannie Mae. The federally backed institution will insure mortgages in two of the development's three buildings, according to their owner Onex Real Estate Partners on Friday. The news marks an important milestone for the long-troubled project.

The two towers, at 40-26 and 40-22 College Point Blvd. in downtown Flushing, are 75% sold or in contract, according to Onex. Sales at the 448-unit development have rebounded since last year when the sponsors settled a lawsuit with dozens of buyers at the development. The buyers had sued to get out of their contracts to buy $50 million worth of apartments. The settlement gave them more than $3 million.

Two years ago Related Cos. was tapped to manage the residential property to boost sales. Marketing of Sky View Parc began four years ago. Originally, Muss Development was a partner in the project but it is unclear if Muss still has a stake in the project. Onex took over in 2010. Sales of 134-unit Tower 2, the last building to rise at Sky View Parc, have not begun yet. The status of that building could not be determined immediately. Muss couldn't be immediately reached for comment.

Buyers get refunds from Sky View Parc

From the NY Post:

Sponsors of the massive, $1 billion Sky View Parc complex in Flushing will refund 75 percent of $5 million in down payments to buyers who backed out of contracts on $50 million worth of luxury apartments -- a settlement likely to send shivers through the ranks of the city's condo developers.

The agreement will recoup $3.69 million plus interest for 118 buyers represented by Adam Leitman Bailey, a lawyer who has filed suits for plaintiffs in numerous similar cases.

All the buyers sued under the once-obscure federal Interstate Land Sales Full Disclosure Act, which requires condo sponsors to register their project with the Housing and Urban Development department and to provide buyers with "disclosure" reports. As at many other condo projects, that was not done at Sky View Parc, located on College Point Boulevard.

The suit also cited alleged failure by Onex Real Estate Partners to disclose "substantial problems" at the project to the buyers. Those issues, reported in The Post last August, included at the time a $160 million cost overrun and loan restructurings.

Here comes the Bloomberg steamroller

From the Wall Street Journal:

Seeking to kick-start a massive Queens real-estate development project conceived in the boom years, the Bloomberg administration is moving to seize a portion of the site from private property owners.

Next week, the city plans to initiate the eminent-domain process on holdout owners who own property in the first 20-acre phase of the 62-acre project. The city also is planning to solicit bids from developers in the spring, according to city officials.

Known as Willets Point, the development site by Citi Field is slated to ultimately contain more than eight million square feet, with more than 5,000 apartments, a hotel and more than 1.7 million square feet of retail space.

The site currently is filled with junkyards and auto-repair shops, along with some larger industrial properties. The City Council in 2008 approved the use of eminent domain to acquire parcels from holdouts.

The property owners are expected to litigate to block the city action, although New York state laws give the government broad powers to use eminent domain. Similar recent development projects, like the new basketball arena being built at Atlantic Yards in Brooklyn, have survived court challenges.

Seth Pinsky, president of the city's Economic Development Corp., said in an interview Wednesday that the city has purchase agreements with property owners for 88% of the first phase of the site.

There are nine holdouts whose land the city would seek to acquire, and others whose land would be acquired in later phases.

"We just can't wait any longer and need to know that if we can't reach those agreements, that we can still move forward," he said.

Opponents of the project have argued that the city isn't permitted to construct entrance ramps to the Van Wyck Expressway nearby that are called for as part of the project. Richard Lipsky, a lobbyist who represents business owners at the site, says that the eminent domain action was "an absolute disgrace."

"The city is going ahead with a project that no one knows what it will cost, with a developer that no one knows who it will be, and with ramps that no one knows whether they can be built," Mr. Lipsky says.

Mr. Pinsky said the city's position is that it isn't required to build the ramps—which would mitigate traffic congestion on the local streets—until later phases of the project.

The action comes as the city administration is making a bet that the real-estate development industry—in hibernation since 2008—has warmed enough that landlords are willing to take risks on giant construction projects. In April, city officials said, they plan to solicit bids from a set of developers who have previously showed interested in the site, including Related Cos., Muss Development and Sterling Equities.

Sterling Equities?

SkyView Parc is really Mussed up!

From the Wall Street Journal:

In one of the largest cases of buyers remorse in New York, scores of people who agreed to purchase apartments in a new development in Queens filed suit Monday seeking the return of their deposits.

The suit, filed in federal court in Brooklyn, could throw a wrench into the marketing efforts of Sky View Parc, a huge shopping center and condominium development that is planned to eventually include nearly 1,100 apartments in six towers.

The complex is a few blocks from the heart of the Flushing commercial district. It has been controversial because of its size and the impact it might have on local business and traffic.

When the development was first marketed in 2008, prices ranged from $385,000 for studios to more than $1.2 million for three-bedroom units on a high floor. Some prices have been raised slightly and some trimmed slightly since.

The complaint was filed on behalf of 67 would-be buyers in contracts to buy 41 condos. The complaint said that buyers wanted their money back because they were unable to obtain loans after the "collapse of the mortgage market" and were unable to close.

Their lawsuit said that the developers failed to file a disclosure statement. Such a statement is required in large developments under a federal law enacted in 1968 intended to help protect buyers from fraud in new real-estate subdivisions.

Flushing Commons & Sky View Parc lack financing

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.

Developers love Gary

From the Times Ledger:

U.S. Rep. Gary Ackerman (D-Bayside) has raised more than $839,000 for his re-election campaign this election cycle and spent more than $864,219, but he is in the green with $1.139 million in cash on hand.

Ackerman has taken $555,671 from individuals and $257,740 from political action committees from 2009 until June 30 this year, according to Federal Election Commission records.

In the latest filing quarter from April to June 30, the congressman raised $338,000. Most of Ackerman’s contributions were donated in 2009, the records showed.

Campaign finance records showed Ackerman received a lot of monetary support from the Asian community, including former Flushing state Assemblyman Jimmy Meng, who contributed $2,400 to the congressman’s campaign on June 10, 2009.

Developers were among Ackerman’s biggest donors.

Joseph Muss, a principal of the Flushing-based Muss Development Co., contributed $3,400 to Ackerman in June 2009.

Joshua Muss, a partner with Allied Jamaica, gave the congressman $3,500 on June 17, 2009.

Ackerman received more than half of his contributions from individuals.

Political action committees represented more than $250,000 of the congressman’s contributions.

Are these guys kidding?

From the Wall Street Journal:

Flushing already has hundreds of local stores and its position as a transportation hub—the No. 7 subway, city buses and the Long Island Railroad all meet in the heart of downtown Flushing—means that more than 100,000 people pass through daily, including residents of downtown Flushing and commuters who work and shop in the area.

Even though the new mall will increase congestion in an area already packed with pedestrians and cars, there are residents are looking forward to having more national retailers locally. The only regional mall in Queens currently is Queens Center in Elmhurst.

Actually, there are 3 malls in close proximity to each other on Queens Blvd, plus Atlas Park, the Metro Mall, Bay Terrace, etc.

"People are happy to have them because we [often] have to go to Long Island, Manhattan or New Jersey to buy something," said Fred Fu, president of Flushing Development Center, a nonprofit that hosts cultural events in Flushing.

See previous comment.

Though it is too early to tell whether the area's many small, mostly Asian, businesses will be affected, Mr. Fu suggests that the new mall will benefit existing business owners.

"The new stores will generate more customers for the small businesses. People from Long Island City, Jamaica, and Bayside will come here to buy," he says.

Yes, I can see that happening. Heh.

"There is no shortage of patrons to Flushing, but it is dramatically underserved from a retail and residential perspective," said Michael Dana, president of Onex Real Estate Partners and developer of the project. Forest Hills-based Muss Development LLC is co-owner of the project.

Underserved from a retail and residential perspective? That's a good one. Go ahead and delude yourself into thinking that.

Now that's Mussed up!

From The Real Deal:

Even as it garners some negative attention in Queens, Muss continues to look for new opportunities.

According to the Observer, Muss is one of the 29 firms that submitted a competitive bid to the city to redevelop the massive Willets Point site in Queens. The company is up against heavy hitters like Silverstein Properties and Related, but may have an edge thanks to its experience in the boroughs.

They're kidding, right?

Richard Xia, president of Fleet Financial Group, a developer in Flushing who sold out his new luxury Shangri-La Towers condo development last year in spite of the downturn, attributed the challenges facing Sky View Parc to its location, which "is a little bit off the center of Flushing and the downtown area."

But he noted that the Bloomberg administration's Flushing redevelopment plan calls for an overall shift of downtown's center of gravity toward College Point Boulevard, where Sky View Parc is located.

The construction of Sky View Parc, in fact, is designed in part to help facilitate that shift.

Ahh, yeah, we figured that out...

Traffic at SkyView Parc a concern

From the Daily News:

THE SPRAWLING complex of condos and stores dubbed Sky View has been a looming presence on the Flushing landscape for years.

But the white colossus has been more of an uninhabited fortress of solitude until recently.

The first closings at Sky View Parc - several towers of condos set atop a shopping center at College Point Blvd. and Roosevelt Ave. - are set to begin in June.

Many locals have mixed feelings about the development, especially because the area is inundated with planned new projects with construction that promises to last for years to come.

"I'm excited about the project, but I do have some concerns," said Assemblywoman Grace Meng.

"That area is crowded now, any time of the day," said Meng (D-Flushing). "A serious concern is for parking, traffic flow and congestion."

There will be 1,650 retail and 350 residential parking spots when the first phase of construction ends, Rose said. When the final three towers are built, 400 spaces will be added.

The city Transportation Department plans to check the timing of traffic signals at College Point Blvd. and Roosevelt Ave. for delays due to heavier traffic in the area, agency officials said.

Some local leaders aren't so sure that will cut it.

"We don't believe the traffic scenario is going to work," said Community Board 7 Chairman Gene Kelty, though he conceded that the area could "always use the housing."

"The problem is the location," he said.

Muss takes a back seat at Sky View Parc

From the NY Post:

Muss Development's equity partner in its massive Sky View Parc complex near Flushing Meadows Park "has taken over the driver's seat" in the slow-moving, $1 billion-plus scheme, sources said.

Toronto-based private-equity firm Onex "started calling the shots," an insider said, even before it brought Related Cos. into the huge Queens project as a "consultant" with a role in apartment-sale marketing at three towers now under construction, as well as in retail leasing and management.

A Related source said the Time Warner Center developer has sent in an army of specialists before it even formalizes a deal with Onex.

Related will have no equity. But the arrangement would seem to open the door to the Stephen M. Ross-led development giant to one day land such a role in Joshua and Jason Muss's second trio of planned luxury apartment towers at the site, for which no start date is set.

The source close to Related said the company understood that there's "full commitment" for Muss and Onex to put up the three additional towers, but noted, "it would be timed to market demand."

Onex, which pumped at least $70 million into Sky View Parc, left decision-making to Muss until recently, but has since "restructured" the relationship.

Muss can't cut the mustard at Sky View Parc

From Crains:

Related Cos. is being tapped to manage sales and leasing for Sky View Parc, the massive mixed-use complex in Flushing, Queens, being constructed by Muss Development.

Sources said that Muss' financial partner, Onex, a private equity firm that has invested $66 million in the project, has been frustrated by pace of activity at the 3.3 million-square-foot development and demanded changes be made. Both partners approached Related, which has yet to sign a contract, although the deal is imminent, sources said.

The project features six residential towers and a rooftop park set atop a three-story, 800,000-square-foot shopping center. The first three towers are close to being completed. Muss would not comment, but in a press release last year, it said 70% of the 448 condo units in the first building were sold. It also stated that 30% of the units in the second building were sold. Sales hadn't started on the third tower, according to media reports.

Muss has interesting definition of "affordable"

From The Real Deal:

Lower prices and the first-time homebuyer tax credit have fueled the recent surge in sales activity in Flushing, sources said.

And there is a transition afoot there that's feeding the demand for more upscale housing, said Corcoran's Hultmann.

He noted that locals want to stay in the community, "but want to have some Manhattan living there."

That's the promise of some developers in Flushing: high-end living at affordable prices.

Main Street in the neighborhood is bustling with retail and is home to some of the new projects, including Sky View Parc, a mixed-use development that launched sales in 2008.

Toby Klein, senior vice president and director of sales and marketing for Muss, echoed that point, saying the firm has been able to keep prices around $600 per square foot.

Most of the development consists of one- and two-bedrooms, with asking prices ranging from $400,000 to $800,000.

How is that considered "affordable"?

This week's Trib like syrup of ipecac

Shepard Fairey, it ain't.

This photo is just too perfect. Won't mess it up with unnecessary commentary.

A developer wishing Johnny his warm greetings...what a shock!

A self-certifier doing the same.

Gene's not looking like himself lately. Mainly because that photo is not of him. His name is Jim Rogers and he was the Vice Chair of CB11, not Board 7. He was Melinda Katz's "boyfriend" for many years.

Some priceless expressions on these 2 pusses.

Just when you think the Trib can't top itself...it does!

Skyview Parc violates FAA height restrictions

From the Times Ledger:

Muss Development also sought a variance from the board on its massive Sky View Parc development in Flushing. Three of the projects’ six residential towers are already built, but the developer now needs a variance from the city Board of Standards and Appeals because the 14-story buildings pierce height restrictions set by the Federal Aviation Administration to protect flight paths of aircraft entering and leaving LaGuardia Airport.

Jerald Johnson, an attorney for Muss, presented a letter in which the FAA approved the buildings’ height, but another letter, from the Port Authority of New York & New Jersey, said the FAA had rescinded its decision.

“I’m at a loss here,” Apelian said. “A lot of phone calls have been made about this and we still don’t have any resolution.”

“I’m a little bit at a loss as well,” Johnson said. “No one has contacted us to tell us our FAA ruling is in error.”

In the end, the board approved the variance with a request that the confusion be ironed out before the BSA rules on it next month.

“It’s not like this is waiting for an application to be approved,” Apelian said. “The buildings are built. So either it’s good or it isn’t good. There’s not really a lot we as a board can do.”

How did the DOB approve these buildings in the first place if there is a height limit in that area?

A BJ's for Muss

From Crain's:

Send in the big boxes. Members-only warehouse-style retailer BJ’s Wholesale Club Inc. just signed on for 121,000 square feet at Muss Development’s sprawling shopping center at Sky View Parc on College Point Boulevard in Flushing, Queens. The asking rent for the 20-year ground-floor deal was not disclosed, but real estate sources say asking rents in the area are typically around $40 a square foot.

The store is expected to open by November. It will join other large retailers, including Bed Bath & Beyond, Best Buy and Target, at the 800,000-square-foot center. Chain restaurant Applebee’s Neighborhood Grill & Bar also recently signed on to lease 6,500 square feet at the shopping center, where the eatery plans to open in the spring of next year. The center is now 70% leased.

Photo from The Real Deal

Sky View Parc gets Mussed up

From Crain's:

A dispute among lenders could soon halt construction of Sky View Parc, one of New York's biggest projects, throwing nearly 400 workers off the job.

The conflict over Muss Development's 3.3 million-square-foot retail and residential complex in Flushing, Queens, surfaced two months ago, when Arbor Realty Trust stopped paying monthly advances on its portion of the loan, according to sources close to the matter. Fearing that other lenders would also stop making payments, Muss ponied up about $4 million to cover Arbor's share.

The situation reaches a key juncture this week as lenders are slated to release their next portions. With Arbor showing no sign of resuming lending and Muss reluctant to dole out more cash, a crisis looms. Negotiations between Muss and its other lenders—led by Wachovia and Eurohypo AG—are at an impasse. That threatens funding for Sky View's first phase, which is supposed to be finished by this summer.

Industry insiders say one of the most troubling aspects is that the deal involves not some highly leveraged upstart but one of the industry's strongest players.

What a difference a month makes! Hey Joshua, you're not alone.

Flushing gets Muss-ed up

Queens Chronicle interview with Muss Development Vice President Jason A. Muss

Q. How has the economic situation affected your operations? Has it impacted Sky View Parc, the big condo and retail complex you’re building in Flushing?

A. The economic situation is affecting every aspect of our operations. There’s no hiding from the fact that things are just not as flush as they were. ... It’s simply not the days of year-over-year increases and overwhelmingly wonderful things happening all the time. Sky View Parc is ... a project that can’t be duplicated anywhere in New York City, based on the fact that you will not find another 15-acre parcel located smack in the middle of Queens, in the middle of two airports, [with] a subway, a Long Island Rail Road station and the biggest bus terminal in Queens, all within two blocks of the site.

Actually, there is a nearby 64-acre parcel located smack in the middle of Queens, in the middle of two airports, [with] a subway, a Long Island Rail Road station and the biggest bus terminal in Queens, all within two blocks of the site. Sounds like
Muss doesn't plan to bid on that one. Hmmm...we're narrowing the contenders down even further. NY1 also did an ad/story about this project.

P.S. Thank you Jason...we don't have enough people in Flushing now.

Let's take a look at the Willets Point finalists, part 1

March 2006: EDC Announces Eight Finalists for Willets Point Redevelopment

Vornado Realty Trust
Forest City Ratner Companies
General Growth Properties, Inc.,
The Macerich Company and AvalonBay Corporation
The Westfield Corporation
The Related Companies
Muss Development LLC
TDC Development & Construction Company

May 2006: One of the city's most active developers,Vornado Realty Trust, will not submit a final bid to build about 1 million square feet of retail space, a hotel, and a convention center on the 75-acre site near Shea Stadium in Queens.

December 2008: Real-estate developer Forest City Enterprises Inc. said it will halt new projects and focus on reducing debt and managing its existing real-estate portfolio.

December 2008: General Growth Properties Inc. has hired a broker to sell three high-profile shopping malls, including South Street Seaport in Lower Manhattan, as it tries to raise money to pay down its heavy debt load and avoid bankruptcy.

To recap:

Vornado Realty Trust
Forest City Ratner Companies
General Growth Properties, Inc.,
The Macerich Company and AvalonBay Corporation
The Westfield Corporation
The Related Companies
Muss Development LLC
TDC Development & Construction Company

Part 2 coming soon.