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.

Would you pay $1.38M to live along the Flushing River?

From The Real Deal:

The final tower at Sky View Parc, the massive mixed-use project looming over Flushing, Queens, has hit the market, representatives for developer Onex Real Estate Partners, confirmed to The Real Deal today.

The tower, known as Tower 2, holds 134 studio, one-, two- and three-bedrooms over 17 floors, including 22 penthouses, according to a spokesperson for Onex. Helen Lee, a director with Onex, said that 32 percent of the available units were in contract within four hours of the soft sales launch. Onex has marketed apartments at Tower 2 by word of mouth for about the last five weeks, but began officially marketing the condominiums this week.

It seems the tides have turned for the mammoth project, which struggled in recent years, as lawsuits and the recession plagued the development, which reportedly cost an estimated $1 billion to build. In tandem with the 800,000-square-foot mall below, called Sky View Center, the project is the largest mixed-use development in Flushing.

Condos at Tower 2 start at $325,000, a statement from the developer said. The most expensive unit listed so far is a 1,653-square-foot three-bedroom, three-bathroom asking $1.38 million, according to Streeteasy.com.

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.

Baiting buyers with gummy bears

From The Real Deal:

The sales team behind Flushing’s $1 billion luxury condominium towers Skyview Parc won’t be marketing tower two until towers one and three are 75 percent sold. And that isn’t expected to happen until spring 2013, Helen Lee, the director of the Onex Group, which is marketing the building, told The Real Deal. As The Real Deal previously reported, towers two and three recently hit the 50 percent sold mark. Lee said that the prices of units in tower two, which Onex touts as having Skyview’s best light and Manhattan views, have not yet been determined.

The development recently celebrated the opening of “dEmo at the Parc,” an alfresco exhibit featuring the work of the Spanish artist Eladio de Mora, who is known as dEmo. In the four-acre rooftop garden, which boasts a tennis court, a playground and a putting course, dEmo’s 30 rainbow-colored plastic “gummy bears” of various sizes were on display. Top-40 hits played from a D.J. booth added to the promotional event’s playful vibe.

The event’s curator, Maria Boobis of Flushing’s Crossing Art, told The Real Deal that the artist’s goal was simply to make the party’s 81 brokers and 189 residents, guests and VIPs smile.

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.

They're still trying to hype Flushing...

From the NY Post:

One of the big question marks hanging over Queens real estate is what will become of Flushing?

Some New Yorkers know Flushing as the last stop on the 7 train — one stop beyond Citi Field. Or, as the huge Chinatown with its treasure trove of Qingdao and Hunan and Szechuan restaurants.

But it has also been the focus of some serious real estate development activity within the last few years, with a lot more to come. Over the next couple of months, hundreds of new condo units will be hitting the market (that number is slated to balloon into the thousands in the next few years). Along with the first wave of residential buildings are a number of big-box stores. And offices, public space and hotels are all on the drawing board.

But adding dozens of new retail outlets and thousands of new condos in the middle of a recession always carries risk — and Flushing is no exception.

By far the biggest thing coming to the neighborhood is Sky View Parc, a $1 billion, 14-acre development that started construction in 2007 (and went through various freezes and thaws since construction started).

“Flushing, outside of Manhattan, is the most vibrant 24/7 community in all of New York,” says Michael Dana, president of Onex Real Estate Partners, which is developing Sky View Parc. “If you look at entertainment, food, culture, the economy is quite strong in that sub-market, but it’s dramatically under-served from a retail and residential perspective.”

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.

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.