Filling the void

From Crains:

The city rejected a challenge to a planned Upper West Side apartment building that contains large empty spaces between several floors—a gambit meant to boost the overall height of the project and make the upper units more valuable. But Extell Development's planned tower at 50 W. 66th St. is not quite in the clear.

City Councilwoman Helen Rosenthal, who represents the neighborhood, was part of a contingent that opposed the project and supported a challenge, arguing that the excessive mechanical voids were contrary to the city's building codes. On Thursday, however, she announced that the neighborhood's objections had been overruled by the Department of Buildings, which found that the cavernous spaces conformed to building and zoning codes.

"Stilt building" loophole to be eliminated

From Crains:

The city is on schedule to regulate so-called excessive mechanical voids by the end of the year, dealing a blow to developers who use a quirk in the building code to boost the height of their luxury apartment towers.

Mechanical voids are essentially floors used to house the heavy equipment that powers a building's systems. However, by raising the ceilings of these spaces to dizzying heights, developers increasingly have been creating hollow pedestals upon which they can stack luxury apartments. Because these upper units can typically command better views than neighboring structures without large voids, they can be sold at premium prices to pay for the additional construction while still boosting profits. An apartment building proposed by Extell Development at 50 W. 66th St., for example, will have only 40 floors, yet it is slated to be 775 feet tall, according to a neighborhood group opposed to the plan.

Telling it like it is

Ray Rogers condemns NYC's rezoning policies as REBNY policies that benefit fat cat developers like Rob and Jerry Speyer (Tishman Speyer), Jed Walentas (Two Trees Management), Gary Barnett (Extell Development Company) and Daniel Brodsky (The Brodsky Organization). Rogers says REBNY is run by "bullies and racketeers" while speaking at Manhattan Borough President Gale Brewer's rezoning hearing in East Harlem (7-13-17).

Tax benefits are lucrative for builders of luxury high rises

From Capital New York:

One57, the luxury condominium building on West 57th Street in Manhattan, was thrust into the center of a debate this year about the future of a controversial tax break known as 421-a.

Affordable housing activists railed against a maneuver by lawmakers in Albany in 2013 that allowed developer Extell and four other building owners to receive the lucrative tax break for high-end condos without requiring affordable housing, even though they did not qualify for it.

Yet almost two-thirds of Extell's tax relief last year resulted from a state-controlled property tax system that benefits condos and co-ops, and only one-third came from 421-a, according to a study released Tuesday by the New York City Independent Budget Office.

The I.B.O. found that in the 2014 tax year, Extell received $25.4 million in tax breaks—$16 million from the assessment system and $9.4 million from 421-a, which, come January, will require affordable housing of its recipients with few exceptions.

The eight-page report demonstrates that the abatement pales in comparison to the property tax system in how it affords relief to expensive condos.

Will the real Bill DeBlasio please stand up?

From The Daily Beast:

In 2004 de Blasio was a paid adviser to John Edwards’s presidential campaign. And in this year’s mayoral race, his rhetoric about “a tale of two cities”—a line he has used to critique growing income inequality—has echoed Edwards’s rhetoric from 2004 about the “two Americas.” Yet while serving on the City Council, he frequently found himself on the wrong side of progressives in his district (admittedly not hard in ultraliberal Park Slope) and was sometimes blasted for favoring developers and real-estate interests over community concerns about congestion and quality of life.

For example, he sided with a developer in opposing the designation of the Gowanus Canal as a Superfund site—even as nearby residents said that the city was ill equipped to carry out the cleanup on its own. He pushed to allow luxury housing in Brooklyn Bridge Park. And he was one of the primary backers of the controversial redevelopment of Atlantic Yards into a basketball arena for the Brooklyn Nets—a nearly decade-long fight that pitted local residents against powerful real-estate interests.

De Blasio’s most important maneuver has been to capitalize on liberal frustration with Mayor Mike Bloomberg.

“He said that it was necessary to stop the tide of gentrification, but everyone knows this was the most gentrifying thing to ever happen to Brooklyn,” says Lucy Koteen, a local political activist who backs current City Comptroller John Liu. “He is not wrong about the ‘tale of two cities.’ But look at his record. Did he help level the playing field, or is he on the side of developers who have gotten rich displacing people?”

From the NY Post:

The City Planning Commission rep appointed by Public Advocate Bill de Blasio — a critic of big developers — voted with the administration 93 percent of the time, records show.

One of those votes was to approve Extell’s West Side tower that includes a “poor door” separating subsidized tenants from those paying market rents.

A de Blasio spokesman said the rep actually fought “the poor door,” but Extell found a way around her objection.

De Blasio’s rep has voted in favor of 554 out of 595 projects since 2010.

Capital New York has a good wrap-up of his development stances in the past.

Second class citizens?

From the Village Voice:

Dear big developers: Not every tax break is worth a bad headline. Extell Development Company is building a 274-unit luxury condo building in the Upper West Side, with plans to put in a separate door for people living in its planned below-market-rate units. The reason? It's a workaround enabled by the city's Inclusionary Housing law to help Extel collect on some major tax breaks and building allowances. Local residents are upset and have gotten their elected officials to jump into the ring.

Of the 274 units in the building, 55 will be below-market-rate housing, meaning only those earning less than 60 percent of the neighborhood's median income will be eligible for leases. That's about $51,000 for a family of four for the Upper West Side--about the same as the median income for the city as a whole.

The building's affordable units would occupy floors two through six, attached to the building but legally as a separate entity. That separate entity allows Extell to cash in millions in affordances for technically having an entire building devoted to affordable housing. To add insult to injury, zoning law requires that a separate building have a separate entrance.

Neighbors are crying wolf when it comes to Extell's blueprints, accusing the developer of demeaning potential tenants with the second entrance.

He's such a reformer...

From the Daily News:

The deep-pocketed real estate investors who own a landmark former stock exchange building in lower Manhattan lavished Gov. Cuomo with $76,000 in campaign donations just weeks before Cuomo approved a lucrative tax break for their property.

Three partners at Fisher Brothers, which owns the historic New York Curb Exchange at 86 Trinity Place, each cut $25,000 checks to Cuomo on Dec. 27. One exec kicked in an additional $1,000 on Jan. 11, and Cuomo okayed the tax breaks Jan. 30. Fisher plans a high-rise residential tower at the site.

The contributions from the Fisher Brothers execs are just the latest to emerge in the controversy over five Manhattan properties that were singled out for tax breaks in a January bill. The Daily News reported last week that one of the other beneficiaries, Extell Development Co., gave $100,000 to Cuomo days before he signed the bill.

The breaks mean $35 million in tax relief over 10 years for Extell’s planned One57 luxury apartment tower on W. 57th St.

Extell President Gary Barnett also donated $100,000 three weeks after the bill was signed to a state Democratic Party account that Cuomo was using to pay for ads pushing his agenda.

An anti-corruption commission created by Cuomo has subpoenaed the five companies.

Do as he says, not as he does

From the Daily News:

A top development company donated $100,000 to Gov. Cuomo just days before he signed a bill that quietly showered the firm with lucrative tax breaks.

Two corporations tied to Extell Development each contributed $50,000 to Cuomo’s campaign, which recorded the checks on Jan. 28 — the same day the Assembly passed a housing bill that contained tax breaks for five developers, including Extell, records show.

Cuomo signed the legislation two days later.

The twin $50,000 donations were made by Elco Master LLC and 134 W 58 LLC. Each listed the same Louisville, Ky., address of Extell Financial Services, which is part of Extell Development. It was the first time either company contributed to Cuomo, state records show.

And less than three weeks after the bill became law, Extell President Gary Barnett donated $100,000 to a state Democratic Party account that Cuomo was tapping to finance ads pushing his agenda. Records dating to 1999 show it was the only time he gave to the state party.

Union strike may grind building to a halt

From Crains:

With a contract deadline a week away, a survey of developers has found that a work stoppage by operating engineers could silence construction on private-sector projects worth nearly $10 billion and temporarily idle more than 11,300 workers.

With the operating engineers' union contracts set to expire June 30, the Real Estate Board of New York survey shows that work could stop on commercial and retail projects spanning more than 13 million square feet and on residential sites totaling more than 6,300 units.

Projects that could be halted include Forest City Ratner's Barclays Center in Brooklyn, which employs 1,000 construction workers; Silverstein Properties' World Trade Center Tower 4, which employs 800; and Extell Development Co.'s International Gem Tower in midtown, which employs 500.

What conflict of interest?

From the NY Observer:

The folks at Extell Development are apparently fans of Christine Quinn.

Late last month, Lela Goren, a business partner of Extell's who does extensive work with the company, held a fundraiser in the West Village for Council Speaker Christine Quinn that was attended by many executives from Extell. Ms. Quinn is eyeing a run for mayor in 2013.

Real estate donations are nothing novel in campaigns, but this fundraiser happened at the very time that Extell is seeking zoning approval from the City Council for its mega-Riverside Center residential development, which is envisioned to hold 2,500 apartments.