Sterling Equities & Related Companies Lose A Court Battle

Plans to Build Shopping Mall on Flushing Meadows Corona Park Land Reversed on Appeal, but Legal Wrangling will Continue

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Real Estate In Flushing - Willets Point

April 14, 2011 / Flushing Neighborhood / Queens Buzz / Gotham Buzz NYC.

 

This winter I attended the State of the Borough Address given by Queens Borough president Helen Marshall and a month later I attended a speech given by NYC deputy mayor of economic development, Robert K. Steel. This report captures their brief comments about Willets Point condominium and retail development project, as well as a considerable amount of research I did following those two presentations.

 

In the following report we provide you with a history of the effort to transform the Willets Point area and an outline of the proposed plans and including a detailing of some of the issues associated with the proposed development. A graphical depiction of the Willets Point development is shown above.

Click here to read more about Sterling Equities, Saul Katz & Fred Wilpon, Stephen Ross, Related Companies, Mayor Bloomberg use eminent domain on Willets Point real estate development project - controversy in Flushing Queens.

Real Estate In Flushing - Willets Point

April 14, 2011 / Flushing Neighborhood / Queens Buzz / Gotham Buzz NYC. Continued.

 

Willets Point Real Estate Developement Assessment

In 2002 city planners started working with local community groups to re-develop Willets Point. Over the course of the next few years it was decided that the neighborhood would have to be developed in toto versus a parcel by parcel approach because of some of the environmental conditions surrounding the neighborhood.

Some of the issues cited by city planners were widespread contamination from prior land use including ash deposits dating back a century and illegal dumping and oil spills from this century. They also cite that the area has a high water table [its adjacent to the Flushing Harbor / Long Island Sound] and that it lies within a 100 year flood plain.

In order to bring the neighborhood within FEMA [Federal Emergency Management Agency] guidelines a significant investment would be required to raise sections of the neighborhood by as much as six feet. The neighborhood is also in need of upgrades to its sewage system. All of this lead them to the conclusion that the neighborhood should be transformed all at once. A March 2011 photo of perhaps the best known street in Willets Point is shown to your right.

 

Willets Point Real Estate Development Plan

Willets Point re-development has long been on city government's to do list. Between 2002 and 2006 information was gathered, discussions held and a plan began to emerge. From 2006 to 2008 the city started selling the plan to the various interested constituencies, and by the end of 2008 had sought and received approval to rezone the neighborhood for its plan. A graphical depiction of the new zoning codes is shown in the photo to your left.

The city proposal is to plow the current Willets Point neighborhood completely under and begin anew. The proposal calls for a 400,000 square foot convention center [Jacob Javits is 675,000 square feet], 1,700,000 square feet of retail space, 500,000 square feet of office space, about 350,000 square feet of open space, 150,000 square feet of community space, 700 hotel rooms, 5,500 units of housing [about 20% of it affordable housing], 6,700 parking spaces and a school with 850 seats.

 

Willets Point Development Benefits

One of the primary purposes of the Willets Point Development is to clean up what many consider an urban blight, and its associated environmental / FEMA issues. City planners also estimate the first non-Manhattan NYC convention center would generate 5,300 additional jobs. City planners would also like to make many of the buildings LEED [Leadership Engineering Efficiency Design] certified, which means they would be energy efficient.

Willets Point Issues - Congestion

Experts estimate that the Willets Point development will generate an additional 80,000 vehicle trips per day. To help ease congestion associated with such a significant increase in vehicular traffic in the area, city officials pledged to obtain federal and state approvals to add two ramps to the Van Wyck Expressway. As of this report they have not obtained either governing body approval. The graphic depiction to your right shows the proposed changes to the Van Wyck Expressway to accommodate the increase in traffic expected from the Willets Point development project.

 

And, like the Flushing Commons development, this development would increase the burden on the number 7 subway line which is already running at capacity during peak times and for which no further expansion is planned at this time.

 

Willets Point Real Estate Development Controversy

The Willets Point controversy appears to have arisen out of the desire of many Willets Point business owners to stay where they are, and to continue owning their own property and running their own businesses. In what has historically been a rarely used government action - the use of eminent domain - city government threatened to force landowners off their property against their will.

Currently there are still dozens of small landowners and one resident from Willets Point who continue to resist the city's re-development effort. The city has already acquired 90% of the land and they have already begun to work the site. The photo to your left was taken in March of 2011 and shows signs that the city has already begun to clean up the proposed Willets Point development site.

The group of owners, through their lawyer, challenged the city in the courts stating that the use of eminent domain requires demonstration of a public use. Since no developer has signed on to the plan outlined above, and won't sign up without the city paying many millions for all of the clean up and the new infrastructure, the group claims it's just a plan - not a public use.

 

Willets Point Real Estate Development - Flushing

A fire broke out the first week of April 2011 at Willets Point and a building of one of the holdouts was severely damaged. Approximately 140 firemen responded to extinguish the blaze - one of whom suffered minor injuries.

The city said it will use eminent domain to seize the remaining properties in 2012 if necessary. In an eminent domain seizure, a fair value payment is required to seize the land.

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Airport Expansion – Queens Construction Projects

LaGuardia Airport opened its new control tower in January of 2011. It replaces the LaGuardia Airport control tower installed in anticipation of traffic for the 1964 World’s Fair.

Throgs Neck Bridge – Queens Construction Projects

The Throgs Neck Bridge connects Queens and the Bronx and turned 50 this year [erected 1961]. Approximately 114,000 people cross the bridge every day. Many inbound drivers come through the Kew Gardens interchange which will undergo some renovation this coming year. Watch for summer traffic.

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Queens Real Estate - Related Stories

City Withdraws Plans To Use Eminent Domain

May 11, 2012 / Flushing / Queens Buzz. The Bloomberg Administration withdrew its threat to use eminent domain to condem the properties of the remaining Willets Point property-owners who did not want to sell their land. This statement was issued just prior to the beginning of court proceedings by the remaining holdouts, contesting the city's use of eminent domain.

The city had planned to remove the final holdouts and clear the way for a large new development that would include residential, commercial and office space, and parking. The city now owns 90% of the land in Willets Point, having bought out most of the prior owners.

Click here for a subsequent report about the Willets Point development in Flushing - eminent domain Sterling Companies Wilpon Katz Related Companies Steven Ross.

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Queens Realtors, Queens Insurance & Banking - Links

Click here to go to the home page of TBD realtors.

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Real Estate In Queens - Related Info

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Hunters Point South Opens Spring 2015

'Affordable' Housing Applications Set To Begin Mid October

September 29, 2014 / Queens Real Estate / News & Analysis / Gotham Buzz NYC. 

On Monday evening I headed over to Sunnyside Community Services Center to attend the Hunters Point South Affordable Housing meeting. Several years ago the Hunters Point South development was approved by Community Board 2 and subsequently approved by the New York City Council and former Mayor Bloomberg. Click the link above to read the earlier report.

The site has been under construction for years, and according to a Related Companies spokesperson at the meeting, the two towers containing affordable housing are to open to residents in the Spring of 2015. Naturally this assumes that all goes according to plan.

Hence on Monday evening, Related Companies representatives in tandem with Community Board Chairman Joe Conley, NY CCM Jimmy Van Bramer, NYS Assemblywoman Cathy Nolan [and NYS Senator Michael Gianaris was scheduled to appear but did not make it] - began the outreach to the community regarding the application process for the low income and affordable housing units in the two buildings.

Attendance and interest by the community was very high and folks who arrived late were turned away as the Sunnyside Community Service Center was filled to capacity. That said there are two more of these outreach programs scheduled, the details of which you can find in our Things To Do calendar in the Business section. Click these links to gain a broader perspective of the Long Island City Neighborhood in which these units reside, as well as of the LIC real estate market for apts and condos or the Long Island City real estate market in general.

Full Report Contains Slides & Info On Qualification & Application Process For Hunters Point South Affordable Housing Units In LIC & Evaluation Of Affordability Versus Income & Apt Rents In LIC

Click here to read the rest of our report, including a photo slide show of the presentation of Affordable Housing in Hunters Point South in LIC Queens. I left out most of the presentation that dealt with how to set up a Housing Connect Profile and how to fill out the online application as it seemed pretty straightforward and you can also call the NYC Housing Authority [aka NYCHA] if you need help.

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Hunters Point South To Open Spring 2015

'Affordable' Housing Applications Set To Begin Mid October

September 29, 2014 / Queens Real Estate / News & Analysis / Gotham Buzz NYC. Continued.

NY City Councilmember Jimmy Van Bramer, NYS Assemblywoman Cathy Nolan and Community Board Chairman Joseph Conley all kept their remarks brief in order to let the representatives from the Related Companies and the NYC Housing Authority [aka NYCHA] tell the audience about the buildings and apartments that were to be leased and how to go about applying for them. We have included photos of the Related Companies slide presentation as well as a few from the presentation given by NYCHA, but we recommend you contact the Related Companies, NYCHA or NYC Coucilmember Van Bramer or NYS Assemblywoman Nolan to be sure you have complete information.

Hunters Point South Real Estate Development - Affordable Housing Apts

The Related Companies talked about the two towers in which the Affordable and Low Income housing would be placed: Hunters Point South Commons and Hunters Point South Crossing. The Hunters Point South Commons is the larger building rising 37 stories high with 619 units of affordable and low income housing and the Hunters Point South Crossing rising 32 stories high with 306 units of affordable and low income housing. Of the 619 units in the HPS Commons, 124 of them will consist of low income housing, while the remainder will be moderate income housing. Of the 306 units in the HPS Crossing, 82 of them will consist of low income housing while the remainder will be moderate income housing.

They told us the buildings are 60% to 70% completed and are on schedule to be completed in Spring of 2015. And that a Hunters Point South team [I believe of Related Companies] would be handling the applications. Hunters Point South was developed by Related Companies in collaboration with Phipps Houses, a non profit housing organization run by Adam Weinstein.

Related Companies specializes in developing luxury / affordable housing in large metro areas across the nation. Related Company Founder Stephen M. Ross got his start in the 1970's by seeking real estate tax breaks and incentives - first for clients and then for himself - eventually founding the Related Companies.

Hunters Point South Affordable Housing In LIC - Building Amenties

The Hunters Point South buildings will have 24 / 7 doormen. Pets are welcomed, but are limited to weight of 75 lbs or less. There are 250 parking spots in Hunters Point Commons which will be leased on a first come - first serve basis. Heat and hot water are included with the rent. Both buildings are non-smoking. Both buildings include hurricane-resistant measures such as back up generators and the housing of the infrastructure components on higher floors [versus in the basements].

Low Income Metrics For Queens Housing Based On NYC Income Measures - $18,000 - $49,000

The incomes required to qualify for the low and moderate income housing are based on percentages of the AMI or Average Median Income for NYC as a whole - not Queens. The qualifying HOUSEHOLD income for Low Income Housing units are calculated at 40% and 50% of AMI [Average Median Income for NYC]. These incomes range from about $18,000 to $38,000 for the 40% of AMI to about $24,000 to $49,000 for the 50% of AMI units.

Moderate Income Metrics For NYC & Queens Housing - $55,000 - $222,000

The moderate incomes required to qualify for affordable housing are set at 130% of AMI, 141% to 150% of AMI, and from 165% to 205% of AMI based on the charts provided in the handouts. What happens to those who fall in between the gaps in these percentages currently eludes me, but I'm checking. The qualifying income ranges for the three categories named above are [respectively]: 1) about $55,000 to $162,000, 2) about $60,000 to $160,000, and 3) about $70,000 to $222,000.

U.S. Census - Income Distribution - Top 5% U.S. Income Earners Eligible For Affordable Housing Units

I found it interesting to note that anyone making over $196,000 per year [among the top 5% of income earners in the nation] are eligible to compete for affordable housing. One might want to ask former Mayor Michael Bloomberg and other government officials about the public policy value of helping households in the top 5% income bracket [according to the 2013 U.S. Census and who earn hundreds of thousands of dollars each year] qualify for affordable housing.

Low Income & Affordable Housing Rents At Hunters Point South

The rents for the low income units are as follows: a) Studios go for between $494 - $640, b) 1 BR goes for between $533 - $689, c) 2 BR goes for $648 - $835 and d) 3 BR goes for $743 - $959.

The rents for the moderate income units are as follows: a) Studios go for between $1561 - $1997, b) 1 BR goes for between $1965 - $2509, c) 2 BR goes for $2366 - $3300 and d) 3 BR goes for $2729 - $4346.

They also set a limit on the number of people which are that studios house only one person, 1 BR house up to 2 people, 2 BR up to 4 people and 3 BR up to 6 people.

Queens Residents' Median Household Income - $58,000 Per U.S. Census In 2013

I thought it might be of some value to cross reference the annual Hunters Point South rents for the low income and affordable housing units relative to the annual household income of Queens. The U.S. Census reported that the median annual household income for Queens was just under $58,000.

How Affordable Is Hunters Point South 'Low Income' 'Affordable' Housing?

Hence the low income units of Hunters Point South are great value at about a bit over $7,000 per annum for a studio and a bit under $12,000 per annum for a three bedroom. These units appear to be very affordable.

Homelessness In NYC At All-Time High: 60,000 Of Which More Than 23,000 Are Children

According to the Coalition For The Homeless, in January of 2014 there were nearly 54,000 homeless, of which nearly 23,000 were children. This was another all-time high record. I attended a housing seminar in September 2014 where they provided an update of these numbers which had climbed to 57,000 homeless in NYC shelters and they estimated there were another 3,000 living on the streets.

The homelessness rise grew aggressively during the course of former Mayor Bloomberg's terms - more than doubling from the low 20,000's to the 54,000 tally when he left office. Bloomberg began to address the issue by incenting developers to build 'affordable' high rise luxury housing. Mayor de Blasio ran for Mayor on a theme of The Tale Of Two Cities - talking about how the richer got richer as the poor became poorer.

NYC Housing Crisis Challenges - Balancing Profitable Enterprise & Equal Opportunity

One of the challenges in meeting NYC's housing needs is to balance the need by private enterprise to make money and careful management of taxpayer funds with social and moral obligation to live up to the American dream of providing all humans with Equal Opportunity. For those 23,000 children currently living in homeless shelters during the formative years of their lives, equal opportunity is but a dream. It would be hard to concentrate and get a good education when their family life is so unstable.

Government solutions to the problem of providing housing to the poor have a questionable track record at best. One of the solutions was to build large government-owned buildings and to rent them to the poor. In past decades these became the front lines to the drug wars and centers of racial strife. But a lot of that has begun to fade into the past. Because the public perception of public housing was established during the drug wars, one of the challenges facing public housing is that it carries a historical stigma. The intelligent aspect of creating public housing was that it addressed the housing supply shortage in order to balance the supply and demand scales of capitalism in favor of providing ample supply which in turn helps keep prices down.

Another solution was to provide tenants with government subsidies. This actually worsens the problem as it artificially increases the demand and subsequent prices for housing.

And a third solution was rent control. Rent control is established whereby the government sets a limit on the amount [percent] of increase that a landlord is allowed to raise rents. The problem with this solution is that it discourages investment in housing supply as real estate investors want to be able to set their own prices.

The Bloomberg solution was to incent private real estate developers to build high rise luxury buildings that include some allocation of low income and moderate income 'affordable' housing. Like public housing this approach addresses the supply side of the capitalist equation of supply and demand. De Blasio appears to be following the same line of thought in pursuing a solution to the housing shortage in NYC, by expanding private developers investment opportunity in exchange for 'affordable' housing.

One other approach to addressing NYC's housing shortage has been to allow landlords to rent subterranean units [basements] which are currently illegal as there are issues with escaping fires and the air quality because renters would be living with the building infrastructure such as sewage / plumbing and furnaces.

Affordable In Name Only: Is Paying 33% to 91% Of Median Household Income Affordable?

One can fairly ask how NYC government officials arrived at the moderate income rental valuations which run from a low of about $19,000 per annum for a Studio to about $53,000 per annum for a three bedroom apartment in LIC.

Given that half of the households in Queens earn less than $58,000 per annum, the three bedroom apartments are completely unaffordable. Once the tenant pays their annual rent, they would have $4,000 left for all other living expenses for the entire year. And this is an example of someone in the middle of the household income pack with four to six people in the household.

Historically between 25% and 30% of income was considered a 'fair' amount of one's income to allocate to rent. Yet the Hunters Point South moderate income affordable housing appears to be 'affordable' in name only, as the rent allocations range from a low of 33% to 91% of the Queens borough median income. Given these percentages were calculated using the income at the top of the lower half of household income in the borough - these rents do not appear to reflect moderate or affordable to Queens residents.

Hunters Point South Appears To Be Largely Financed By The Government

Former Mayor Michael Bloomberg negotiated the deal, which also included city funded development of Hunters Point South Park [5 acres of waterfront park], city funded underlying infrastructure such as roads and sewage, a generous terms lease for the NYC Housing Preservation and Development lands upon which the development resides, along with other tax incentives and tax breaks.

Mayor Bill de Blasio criticized Bloomberg's deals with NYC real estate developers during his 2013 campaign for Mayor saying that Mayor Bloomberg had not negotiated very hard for the interests of NYC citizens.

In 2009 NYC bought the 30 acres upon which Hunters Point South resides for $100 million from Empire State Development Corporation [NYS] and the Port Authority of NY / NJ. HDC issued $236 million in tax exempt bonds and HPD providing $68 million in subsidy, while the developer contributed $27 million in equity.

Separate but 'Related': Former Mayor Bloomberg Gives 23 Acres To Related Companies & Sterling Equities For One Dollar - A Deal Approved By Queens City Council Delegation In Nov 2013

The Related Companies has a second Bloomberg affordable housing development underway at CitiField. There are two pieces to it. One segment is a mega shopping mall being developed in tandem with the Sterling Equities [owned by Wilpons who own the Mets]. And the second segment is a mixed housing, retail, school and office space development. The joint venture is called Queens Development Group.

In the latter deal, former Mayor Bloomberg essentially gave the Queens Development Group [owned by Stephen M. Ross & Fred Wilpon] a 23 acre site next to CitiField at Willets Point for $1 which in November of 2013 the Queens delegation of the NYC Council approved. NYC also approved $43 million in tax breaks to the Queens Development Group.

The real estate development will be built on what is technically the public parkland of Flushing Meadows Corona Park. In this case former Mayor Bloomberg used imminent domain to forcibly remove the landowners from their property in order to pave the way for the mixed use development which will include affordable housing [likely structured along the same lines as done at Hunters Point South], as well as a hotel, retail space, a school, parking and office space.

There were several legal skirmishes in the process of concluding this deal which included the illegal execution of imminent domain by the Bloomberg Administration to remove landowners. The Bloomberg Administration also conducted illegal lobbying efforts - wherein NYC funds were used to fund the lobbying of NYC on this project - by a local economic development group lead by former Queens Borough President Claire Shulman. Click here to read a bit more about the Flushing real estate development by the Related Companies.

On August 20, 2014 New York State Supreme Court Judge Manuel Mendez decided that a lawsuit citing that NYC broke the law by not properly executing the Uniform Land Use Review Procedure [ULURP] was invalid.

How Competitive Is Hunters Point South 'Moderate Income' 'Affordable' Housing?

I went online to review the current market rates for apartments comparable to the new Hunters Point South buildings to see at what prices they were leasing. Generally the affordable housing rents were leasing at discounts of between 10% to 53% versus the market rates I found in a online. *Editor's Note: I spent only a couple minutes looking up these rents, so I'm pretty sure you could find better open market rents than I did by looking harder and / or negotiating.

Studios & 1 Bedrooms LIC. I found Studios along the East River waterfront going for about $2,200. And 1 Bedroom / 1 Baths in LIC along the waterfront going for between $2,500 and $3,000. This compares with the Related Companies Hunters Point South affordable housing rates for moderate income earners rent of between $1,600 to $2,000 for a studio in LIC and between $2,500 and $3,200 for a 1 bedroom / 1 bath in LIC. The Hunters Point South Moderate Income Affordable Housing provides a discount of 10% to 27%.*

2 Bedrooms LIC. I found plenty of 2 Bedroom / 2 Baths along the East River in high rise buildings going for about $3,900. This compares with between $2,400 to $3,300 for the 2 Bedrooms cited by Hunters Point South - but they did not claim to provide more than one bathroom either. The Hunters Point South Moderate Income Affordable Housing provides provides a discount of about 20% to 38%.*

2 Bedrooms LIC. And I found plenty of 3 Bedroom / 3 Bathrooms in LIC along the waterfront going for about $5,800, while the Hunters Point South affordable housing leases for between $2,700 and $4,400 - but again without the specification of more than one bathroom. The Hunters Point South Moderate Income Affordable Housing provides a discount of a bit less than 25% to 53%.*

NYC Affordable Housing Preferences - Allocations For Local Residents

There's a preference built into the application process that favors local residents. Specifically this means people who already live in the area served by Community Board Two [see map] which serves Sunnyside, and parts of LIC, Woodside and Maspeth. If you're unsure whether you live in the district, you can contact the Community Board 2 in Queens by emailing them at qn02 @ cb.nyc.gov or contacting the offices of NYS Senator Gianaris, CCM Van Bramer or NYS Assemblywoman Nolan.

So preferences are given as follows: 1) 7% of the units for visual, hearing or mobile impaired, 2) 5% of units for NYC employees, 3) 50% for those who live in Queens Community Board 2 District, and 4) 38% have no preference bias. There are a total of 924 apartments allocated, of which 186 apartments are allocated as low income housing and 738 apartments are allocated as moderate income housing.

New York City Housing Authority - NYCHA

A spokesperson for NYCHA was present to guide the audience through the affordable / low income housing application process that starts in the middle of October. You can approach the application process via mail, in which case I'm going to refer you to the Related Companies or CB2 - using contact info in the slide show below.

Or you can set up a profile in NYC Housing Connect and apply for affordable housing there. You can set up the profile at any time. And then monitor housing openings via the search section, which is where the Hunters Point South affordable housing units will be shown when the application process begins.

They took us through the process, which includes setting up the profile, supplying them with income / tax information, including all income from the household and being careful to check the application before submitting it. Those will be received and after the beginning of the year they will begin the interview process where you willbe asked to bring the info and come prepared to answer questions as they will beverifying the information contained in your submission. Background checks in including credit and criminal records willbe included in the process.

I believe they said they are planning to place the units on the Housing Connect system on October 15th, 2014. You'll see it in the Housing Connect search section when it opens.

Photos of the Hunters Point South Affordable Housing Meeting in Sunnyside

The following slide show contains photos Hunters Point South Affordable Housing Meeting in Sunnyside.

Click here to go directly into the photo album containing Hunters Point South Affordable Housing Meeting in Sunnyside.

Special Thanks To Organizers Of The Session

Special thanks to Community Board 2, Chairman Conley, NYCCM Van Bramer, NYS Assemblywoman Nolan and absent but supportive NYS Senator Gianaris for organizing these public information meetings. There are two more sessions [10/1 and 10/8 at different locales - see the business section of things to do in Queens calendar for time / locale details.

 

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Sunnyside Neighborhood / LIC Neighborhood Links

Click on these advertisements for promotions, discounts and coupons by retailers and restaurateurs in Woodside, Sunnyside and nearby Queens.

Several years ago the Hunters Point South development was approved by Community Board 2 and subsequently approved by the New York City Council and Mayor Bloomberg. Click the link above to read the earlier report.

Click these links to gain a broader perspective of the Long Island City Neighborhood in which these units reside.

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