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The builder who bets on a market that will always leave him the winner

Kevin Maloney will deliver 60 uber-expensive apartments to the market at a time when even he predicts it will be over-saturated. However, the veteran developer is hedging his bets with projects throughout the outer boroughs.

By Konrad Putzier

“Ziel is a pain in the ass, I want you to print that,” said Kevin Maloney, sitting in his windowless office in the Flatiron District.

Then he laughed. For those who don’t know: the developer has a good relationship with his former business partner, Ziel Feldman, who now heads the rival firm, HFZ Development.

Maloney’s relationship with his current partner on a number of projects, Michael Stern of JDS Development, is more troubled.

The two developers reportedly fell out earlier this year — Maloney cryptically speaks of “different philosophies” — and will no longer work together on any projects in the future, following completion of the luxury tower 111 West 57th Street.

The high-profile divorce leaves Maloney’s Property Markets Group in a state of uncertainty. Few real estate investors have been more successful over the past few years. But the firm’s success has been built on two factors it can no longer count on: its partnership with JDS and the strength of the luxury condo market.

The former will soon be a thing of the past, and the latter might well be, too — at least according to a growing number of researchers and developers.

This means Maloney may have to reinvent his business once more if he wants to stay relevant. For better or worse, Property Markets Group’s future may lie in the outer boroughs.

Maloney has been a prominent real estate developer in New York for decades, but his latest string of successes really began in 2009, when a young and still largely unknown Michael Stern approached him.

Stern had gone under contract for a building on West 19th Street, used by Verizon as storage space, with plans of turning it into condos and needed money to close the deal. Maloney, who had sold three hotels just before the market crashed in 2007, happened to be one of the very few real estate investors with money to spend.

Kevin Maloney

The two men partnered up and bought the building for $25 million. It turned out to be a “slam dunk”, in the words of broker Bob Knakal. In a market starved of new development, the Walker Tower (as the former Verizon building became known) was one of the few new luxury condos at a time when foreign and domestic demand for them picked up dramatically. “We underwrote it for 60 percent of what it sold out for,” Maloney recalled.

Stern and Maloney then repeated their success at another former Verizon building at 435 West 50th Street, which they bought for $45 million in January 2013 and christened Stella Tower. The condo conversion is now sold out, according to Maloney. He said the last available unit sold two weeks ago for $41 million. The building’s most expensive condo went for a staggering $51 million.

Flush with money from the Walker Tower and with luxury sales booming across the city, it made perfect sense for Stern and Maloney to take their strategy to the next level.

In March 2013, the developers bought the Steinway Building at 109 West 57th Street for $46 million. They already owned the adjacent parcel at 105 West 57th Street, and the combined lot offered enough width and air rights to build one of the city’s tallest residential towers.

This February, the developers broke ground on a 1,350-foot hotel and condo tower designed by SHoP architects. They are currently looking for a $500 million construction loan, with Maloney saying they have “a couple of offers” from banks.

But whether the project will be even remotely as successful as the Walker and Stella Towers is far from certain. In the months since 111 West 57th Street broke ground, the luxury condo market has slowed significantly.

Extell’s tower One57 has only sold one unit in the third quarter — a pace at which it would take the building six years to sell out. Sales at Harry Macklowe’s 432 Park Avenue have reportedly also slowed.

With several more condo towers set to hit the market in the coming years, some observers already predict a crisis.
“If real estate was a publicly traded company and I could short its stock, I would very happily short 57th Street,” Stonehenge Partners’ CEO Ofer Yardeni said recently. “The market there has stopped. It hasn’t just declined five percent or 10 percent. It’s just stopped.”

Maloney himself is surprisingly pessimistic about the luxury condo market — at least for someone who is investing millions in it.

“Citywide, when you get into apartments above $25 million, the air gets very thin very quickly,” he said. “At any one time there are maybe a half dozen people in the city looking for a $50 million plus apartment, and there’s now probably 60-70 of those apartments on the market.”

He added that if he could redesign his luxury condo project 10 Sullivan, he would probably break its $44 million penthouse up into two or three units.

“There’s going to be some downward pressure at the very high end,” he said.

Maloney reckons it is a “mistake” that developers on 57th Street are primarily putting apartments above $25 million on the market.

Ironically, he is about to do just that. 111 West 57th Street’s full-floor apartments will span roughly 4,000 s/f, and Maloney hopes to sell them for more than $7,000 per s/f. In other words: he is about to unload roughly 60 apartments with an asking price of more than $25 million onto a market that he already considers to be oversaturated.

Maloney is not one to miss the contradiction between the likely asking prices at 111 West 57th Street and his own pessimistic prognosis.

“It’s contrary to what I just said,” he admitted. But he sees reason for optimism in what he calls the low basis cost of the project. He explained that, if need be, he could still make money if he sold each unit for $3,000 per s/f.

Such a buffer between cost and target asking price is a luxury not all developers enjoy. More importantly, Maloney has been hedging his bets across the city and asset classes, buying up land in Brooklyn and Queens. While he is taking a wait-and-see approach to Manhattan’s luxury condo market and hasn’t ruled out developing more such projects in the future, his investments in the outer boroughs allow him to plan for a future beyond Michael Stern and $25 million condos.

In Long Island City, Property Markets Group is developing the 44-story rental tower Queens Plaza South with 400 rental units, which Maloney expects to top out in six months. In November, the firm also bought Long Island City’s clock tower building and an adjacent site in two separate deals for a combined $77 million. Maloney declined to say what his plans for the site are.

Property Markets Group has invested even more heavily in Brooklyn’s Gowanus neighborhood, where it has bought up around about a million square feet (under current zoning) of commercial space over the past four years. “We’re probably trying to do half a dozen buildings there” once the neighborhood gets rezoned, Maloney explained. He added that the planned residential buildings will likely have affordable units and an “arts component.”

Dan Marks, a broker with TerraCRG who specializes in Gowanus, said Property Markets Group got many of its properties for a bargain because it entered the market early.

“These guys were investing in the Gowanus area even before a lot of other companies were,” he said, adding that growing demand for commercial space means the investments will be profitable even if the neighborhood doesn’t get rezoned. A rezoning of Gowanus for residential development is currently under review.

Rental development in Gowanus and Long Island City may not be as flashy as building a Midtown luxury skyscraper, but in a way it seems more in line with Property Markets Group’s culture. The firm occupies a modest space on West 17th Street, whose tiny lobby and windowless offices surrounded by makeshift walls are a world away from the glassy Midtown headquarters of some of its competitors. This is not exactly where you would expect a firm that once counted Gary Barnett and Ziel Feldman as its partners to be based.

The three developers founded Property Markets Group in the early 1990s, when Barnett was still a diamonds trader based in Belgium. “Gary was really the money guy”, Maloney recalled. Barnett was the first to leave the firm, becoming the founder of Extell, and Feldman left in 2005. A framed newspaper clipping on Maloney’s wall shows a Crain’s article from 1994 on their purchase of the Belnord, an apartment building on the Upper West Side.

Although Maloney hasn’t spoken to Barnett in about a year, he said the two are on good terms. He has more regular contact with Ziel Feldman.

“We spent 80 hours a week together for 15 years, so we know each other very, very well,” he said. “When he buys a site, he still writes me and says ‘I just got this great deal’, and I say ‘Yeah, sure you did’”.

 

City shows support for supertall Midtown towers

Rendering of Midtown Manhattan skyline in 2030 (credit: VisualHouse) (inset: Carl Weisbrod)

The de Blasio administration expressed its support for the slew of supertall skyscrapers rising in Midtown Manhattan, responding to elected officials who have criticized the developments and called for measures like height limits and a moratorium on new towers.

The city has “no immediate plans to reduce the as-of-right density or bulk requirements” for such supertall developments, Carl Weisbrod, the director of the Department of City Planning, wrote in an August 12 letter.

Buildings exceeding or planning to exceed 1,000 feet in height — like Extell Development’s One57 condo and hotel tower and JDS Development and Property Markets Group’s 111 West 57th Street — have alarmed groups like the Municipal Art Society and Community Board 5’s Central Park Sunshine Task Force.

Concerns have even prompted a City Council bill that would create a task force to address shadows caused by the developments that are creeping deeper in Central Park, according to Crain’s.

While acknowledging concerns about the shadows and noting his department would continue to monitor the effects of supertall buildings, Weisbrod pointed to “the important role Midtown Manhattan plays in the city’s economy.”

He noted that the towers comply with laws governing density, with such developments distributing their square footage vertically instead of over the block – a move that can actually help preserve older buildings and lead to “a more interesting streetscape and pedestrian experience.” [Crains] – Rey Mashayekh

 

NYC’s Tallest Tower Outside of Manhattan Gets New Renders

queensplazapark.jpg[Queens Plaza Park. Rendering via 6sqft.]

Monday, August 17, 2015, by Evan Bindelglass

 

It’s been known for months that the new tallest building in New York City outside of Manhattan was being planned for right behind the now-landmarked Long Island City clock tower. Now, new renderings published by 6sqft give a better look at the design of the 915-foot-tall tower, known as Queens Plaza Park, that will be sandwiched between Bridge Plaza North and Northern Boulevard on 41st Avenue.

The residential building at 29-37 41st Avenue will encircle the 1927 clock tower, and will be at least 70 stories tall. The tower’s being developed by Property Markets Group and the Hakim Organization , and is designed by SLCE Architects (like just about everything else.) The building is slated to have 800 units and open in 2019.

Developer of huge Red Hook office complex seeks a partner with at least $100M

Milan-based Est4te Four is developing a 1.2 million-square-foot commercial project along the Brooklyn waterfront.

Daniel GeigerBy Daniel Geiger
Photo: NBBJ
Rendering of Red Hook Innovation Studios.

The Italian company that has plans to develop a sprawling office complex along the Red Hook, Brooklyn, waterfront is seeking a partner willing to invest $100 million or more in the project.

Milan-based Est4te Four has hired Cushman & Wakefield, led by Bob Knakal, Cushman’s chairman of investment sales, to market a 49% stake in the development, called Red Hook Innovation Studios. When completed, the project would be the biggest block of newly constructed office space outside Manhattan to be available for rent. According to previous reports, Est4te Four plans to spend $400 million to create the five-building complex, which would total nearly 1.2 million square feet. The project likely will be built in phases over five years and could break ground next year, when leases at the existing properties on the site expire.

The developer, which also has projects in Los Angeles, London and Milan, spent about $61 million over the past three years assembling six adjacent properties located west of Ferris Street, from Coffey to Sullivan streets, in Red Hook. The sites are occupied by either warehouse properties or parking lots.

Est4te Four plans to preserve and restore 202 Coffey St., a two-story, approximately 170,000-square-foot warehouse that’s over 100 years old. The rest of the site would largely be rebuilt. The company is expected to erect four office buildings of up to seven stories. Est4te Four would also create park space, a promenade along the water and retail space at the base of the buildings.

Red Hook Innovation Studios will be designed to appeal to creative, fashion and tech businesses, which increasingly are calling Brooklyn home. Similar commercial destinations in the borough have been successful in drawing tenants. Just south of Red Hook, for instance, Industry City, a 6 million-square-foot collection of former industrial buildings in Sunset Park, has attracted big names like Time Inc.  Meanwhile, the owner of Dumbo Heights, a group of contiguous buildings joined by sky bridges in Dumbo, has nearly filled the complex with several tenants in recent months.

Near its big office project, the Italian company is in the process of converting a former six-story warehouse at 160 Imlay St. into a 70-unit luxury condominium. Patty LaRocco, a broker with Douglas Elliman who is handling sales for that project, said that more than 60 of the building’s units are in contract, with prices averaging more than $1,100 a square foot–among the highest ever netted for residential space in the neighborhood.

3 reasons why China had to devalue: Deutsche

3 reasons why China had to devalue: Deutsche

3 reasons why China had to devalue: Deutsche

Why Shake Shack is eating its rivals' lunch

Bad economic news just prior may be part of the reason why China took the steps it did on its currency, the renminbi. On August 8, China reported its exports fell 8.3% in July. Three days later, China loosened its hold on the currency, causing the yuan’s value to drop immediately.

At the start of the week, the price of a Chinese yuan (CNY/USD) was $0.161. By Friday, it was priced at $0.156, a drop of 3% to where it was trading three years ago.

According to Luke Oliver, U.S. Head of Capital Markets at Deutsche X-trackers, there are three reasons why China needed to devalue its currency.

“One might be the fact that its exports have become less competitive,” said Oliver. “Over the last year, we’ve seen that… China against a basket of currencies has actually strengthened 12% over the last year. That’s a pretty big headwind for Chinese exports.”

While goods are having a tougher time leaving China, it’s a different story with money, notes Oliver, whose team is responsible for three China ETFs in the U.S. with a combined $790 million in assets.

“Secondly, the strong Chinese renminbi seems to encourage outflows from China,” Oliver said. “We’ve seen capital outflows estimated to be about $35 billion per month this year. So perhaps weakening the renminbi will stem that outflow.”

A third reason for devaluation may also have to do with giving China a leading place among global currencies.

China wants the yuan to be part of the International Monetary Fund’s Special Drawing Rights (SDR) basket. Right now, just the U.S. dollar, the euro, the British pound and Japanese yen are in the SDR basket. Adding the yuan to the SDR basket would make China’s renminbi a global reserve currency. But the IMF wants China’s yuan to be more in line with the supply and demand forces of the markets.

“China is trying to work towards the liberalization of its currency that the IMF is looking for as it starts to consider whether China should be part of the SDR,” said Oliver.

He sees the devaluation benefiting Chinese equities in the long-term. In the past week, the Shanghai Composite Index (000001.SS) gained nearly 5%, though it is still 23% off from its all-time high of 5,166.35 set two months ago.

Two of the ETFs (ASHR and ASHS) Oliver’s group manages let U.S. investors buy into Chinese “A-shares,” a class of equities generally restricted to foreigners. A third one (CN) also includes Hong Kong “H-shares.”

“Anything that moves the currency back towards fair market value is a good thing,” said Oliver. “This is all representative of China supporting its economy by taking the action it needs to take. I think for Chinese stocks and Chinese investments this could be a good move.”

Paulson’s hedge fund starts selling land to reap gains in U.S. housing market

Since 2009, the firm’s funds have spent $770 million accumulating 35,000 lots.

By Bloomberg News
Photo: Bloomberg
John Paulson’s firm is selling a bulk of its real estate holdings.

Hedge-fund manager John Paulson, who made billions wagering against subprime mortgages, has started to profit from a U.S. housing bet that took longer to ripen: owning land.

After acquiring about 35,000 lots since 2009, Paulson & Co. shifted toward selling last year and is accelerating its disposition pace, according to Michael Barr, who manages the firm’s real estate. Paulson’s funds had invested $770 million, mostly in lots bought out of bankruptcies or other distressed sales, and acquired two dozen communities in Arizona, California, Colorado, Florida and Nevada.

“The whole thesis here was that land was the best way to play the housing recovery, and that thesis seems to be playing out,” Mr. Barr said in a telephone interview from New York. “In a downturn, land is the hardest-hit real estate asset. Then, in the recovery phase of the cycle, as home prices appreciate, land values appreciate more.”

Paulson—whose lot holdings put the firm almost on par with the 10th-largest U.S. homebuilder—is planning to slowly sell parcels in some projects where prices have rebounded sharply, while holding on to other properties. He’s joining other large land buyers who are selling into a housing market constrained by lot shortages after almost a decade of anemic construction.

Builders replenishing land holdings are finding that prices for finished lots across the U.S. jumped 57% since the bottom in 2009, according to data from John Burns Real Estate Consulting. In some hard-hit markets where distressed properties lured investors, values have more than doubled in the past six years.

Earlier sellers

Paulson is starting to sell relatively late compared with other firms that bought land after the crash, and price gains are now moderating. His firm’s real estate funds have 10 years to return principal to investors after closing, according to a report prepared for California’s Contra Costa County Employees’ Retirement Association, which invested with Paulson.

“Their competitive advantage is their longer-term horizon,” said John Burns, a housing consultant based in Irvine, California, who has done work for Paulson. “They were able to bid on land that most people thought would take a long time to recover, so there were very few bids on it.”

Angelo Gordon & Co., a New York-based firm with $27 billion under management, has sold or optioned about 80% of the 14,000 lots it acquired from 2008 to 2012, according to Louis Friedel, vice president of real estate acquisitions. Starwood Land Ventures, a unit of Barry Sternlicht’s Starwood Capital Group, has sold about half of the 20,000 lots it acquired since 2007 in California, Florida, Arizona and Colorado, Chief Executive Officer Mike Moser said.

Land ‘convexity’

GTIS Partners, which spent about $1 billion since 2009 to buy more than 35,000 lots in 27 markets, has been selling for double or quadruple the price it paid, said CEO Tom Shapiro.

“Land has a lot of convexity to it,” Shapiro said in a telephone interview. “If home prices go up 5 or 10%, land prices can go up 20 or 30%. You have to be careful because it also works on the way down, which is how people got really hurt.”

The housing crash pushed many developers and landowners into bankruptcy, giving investors the opportunity to buy large, unfinished master-planned communities for distressed prices. In 2012, for example, Paulson paid $17 million, or 6% of the outstanding debt, for a post-bankruptcy acquisition of 875 acres (354 hectares) in Lake Las Vegas, Nevada, according to the Contra Costa pension fund report.

That’s less than $20,000 an acre in a market where homebuilders now typically pay $400,000 to $450,000 an acre, said Dennis Smith, CEO of Home Builders Research, a Las Vegas consulting firm. Not all of that increase would turn into profits, because much of the Lake Las Vegas land is set aside for open space and Paulson invested in improvements, such as restoring a golf course.

Slowing gains

Paulson may face risks as prices moderate. Finished lot prices, after jumping as much as 28% in 2013, increased just 2% in the first quarter from a year earlier, according to John Burns Real Estate Consulting. Homebuilders are cutting back on land purchases after “aggressively” spending from 2010 to 2013, Barclays Capital Inc. said in a note this week.

Wheelock Street Capital, which bought 24,000 lots starting around the same time as Paulson, has been a steady seller, said Dan Green, principal at the real estate private equity firm.

“We wanted to get in and buy and enjoy the recovery and not hold until the top” of the market, Mr. Green said.

Builder expansion in locations further from urban areas may fuel demand for the types of lots Paulson owns. The new-home market is expected to grow over the next two years, Susan Maklari, an analyst with UBS Group AG, said in a note to clients Wednesday.

“The housing market is in the process of moving to more volume-based growth, driven by the re-emergence of the entry- level buyer,” Ms. Maklari wrote. “This reflects increasing construction activity further in the periphery, where it is easier for supply to meet demand.”

Master-planned communities can take years to liquidate. Paulson’s first targeted disposition locations include Belmont and Triple Creek in the Tampa, Florida, area; Southshore at Aurora and Crystal Lake outside of Denver; and Lake Las Vegas.

“It’s not because it’s time to get out, but because you’ve got to start to sell these larger, longer-term assets,” Mr. Barr said. “We still think we’re mid-cycle in most of our markets.”

First Chinese, now Korean investors are buying up New York City real estate

As South Korea’s economy struggles, more funds seek higher returns outside of its country.

By Bloomberg News
Photo: Buck Ennis
Korean investors are now eyeing New York real estate.

South Korea’s biggest funds are hoping to get returns from Manhattan eluding them in Seoul.

Korea Post is the latest money manager from the nation to set up shop in New York to find real estate, private equity and hedge fund investments and may hire more people, its U.S. representative Chuljoong Jurng said. It follows National Pension Service and Korea Investment Corp., which have similar offices, chasing better returns from global alternative assets amid low yields at home.

Four interest-rate cuts over the past year haven’t been able to revive South Korea’s economy, which is growing at the slowest pace in two years. The record-low benchmark has stifled returns on bonds, with the government’s 10-year yield shrinking to its lowest ever in April. National Pension Service helped buy a Swedish shopping mall this year, while Shinhan Life Insurance Co. and Hyundai Marine & Fire Insurance Co. helped underwrite a $220 million loan to buy a Manhattan office tower. The buying spree follows similar moves by Chinese investors to park their dollars in New York real estate.

“With the continued low interest rates, it’s inevitable we’ll need to increase alternative investments to boost returns,” Mr. Jurng said. “As our assets under management keep growing, it’s become more important to get access to information and global investment trends for higher returns.”

Global hunt

State-run Korea Post, which oversees 106 trillion won ($89 billion), wants to diversify from stock and bond investments into other sorts of assets, Mr. Jurng said. He expects the new Manhattan office to improve deal sourcing and global research capabilities to help find such opportunities abroad.

Stocks and bonds are less reliable as hedges against each other, according to Kim Eun Gie, a Seoul-based alternative investments analyst at NH Investment & Securities Co. While the securities’ prices have usually been negatively correlated, they’re now moving in unison due to global monetary easing and that’s curbing the effects of diversifying, he said.

Korea’s asset managers have taken note. Their real estate holdings have surged 38% since the end of 2013 to 33.6 trillion won, Korea Financial Investment Association data show. Private equity funds raised 51.2 trillion won at the end of 2014 compared with 44 trillion won a year earlier, according to Korea’s Financial Supervisory Service.

“There aren’t enough alternative assets at home, forcing investors to look abroad,” NH Investment’s Kim said. “Unlike bonds or stocks, alternative investments are typically private, so it’s become essential to open overseas offices to broaden access to information.”

Getting older

Combined assets under management at Korea’s life insurance companies have almost doubled to 537 trillion won as of March 31 over the last five years as people save for retirement. By 2060, the elderly—defined as anyone over 65-years old—will make up 40 percent of the population, Statistics Korea data show.

Alternatives were the best-performing asset class last year for National Pension Service, South Korea’s biggest investor with 470 trillion won of assets. They returned 12.5%, which compared with a 5.25% overall gain. The fund plans to boost holdings of such assets to 11.5% by the end of next year from 9.9% at the end of 2014, it said in June.

National Pension Service, which has both London and New York offices, will also officially open a Singapore location in September to find Asian alternative opportunities, spokeswoman Hwang Ji Hye said.

Big role

“Overseas offices are playing a role in gathering new information and looking for valuable investment opportunities,” said Mr. Hwang. “We’ve been preparing for opening an office in Asia following the New York and London offices to build a strong overseas network.”

Korea Investment Corp., the nation’s $85 billion sovereign wealth fund, plans to almost double its share of alternative investments to 15% by year-end from 8% currently, and aims for 50% over the next five years, Chairman Ahn Hongchul said last month. Ahn expects longer-term returns of at least 10% if holdings rise above half of the portfolio.

It also operates in New York and London, where the focus is on both conventional and alternative assets. The fund plans to send more people from Seoul to those offices, largely to help assess alternative opportunities, said a company official.

“While stocks and bonds are financial assets, alternative assets are real investment, hedging against possible inflation going forward,” NH Investment’s Kim said. “To diversify investment portfolios and boost returns, the alternative investment would be an answer.

Schumer proposes plan for Hudson River rail tunnels

A dispute over funding has kept officials from getting started on a massive project increasingly seen as essential and urgent.

Erik EngquistBy
Photo: Associated Press
Sen. Charles Schumer shared his plan on how to fund the Hudson River tunnel project.

Sen. Charles Schumer on Tuesday proposed a new nonprofit development corporation to plan and finance the construction of new rail tunnels from New Jersey to New York City.

In a speech in Manhattan, the New York senator said that none of the existing transportation entities in the region has the wherewithal to pull off the project on its own. Until now, the project, known as Gateway, has been seen as an Amtrak undertaking coordinated with the Port Authority of New York and New Jersey, New Jersey Transit, the states of New York and New Jersey, New York City, and the Metropolitan Transportation Authority.

The goal is to expand train capacity into New York from New Jersey and the rest of the East Coast, known as the Northeast Corridor portion of the national rail system.

Mr. Schumer said the entire U.S. rail network between Washington and Boston could be disrupted and disabled if the project isn’t built. The network relies on two century-old, single-track tunnels under the Hudson River that allow trains to go in and out of Manhattan simultaneously. If one were shut down for repairs, traffic would be cut from 24 hourly trains to six.

A new two-track tunnel would cost an estimated $14 billion. Gov. Andrew Cuomo told federal officials last week that New York would need federal grants, not loans, to fund the project, which would take at least a decade to build. Amtrak has already spent $300 million on preparatory work.

“I commend Sen. Schumer for making these tunnels a national priority,” Mr. Cuomo said in a statement Tuesday. “We both agree that they will require significant federal investment and I look forward to working with him to move this critical project forward.”

Mr. Schumer’s proposal was also cheered by the General Contractors Association of New York, whose members would presumably do much of the work on such a project.

“Senator Schumer provided both a visionary leadership and a practical road-map for building Gateway,” said the group’s executive director, Denise Richardson. “It is an essential regional and national project that has been languishing for too long. Without it, the economies of all the states along the entire Northeast‎ Corridor could revert to their 19th-century status.”

The Associated Press contributed to this report.

Two more massive projects planned for Astoria

The housing developments, on seven areas of Queens waterfront, will also fill in some of the missing pieces of a greenway.

Joe AnutaBy
Photo: STUDIO V Architecture
Plans are in the works for two big development projects that could rise between Alma Realty’s Astoria Cove project (the white buildings shown to the left in the rendering) and the Durst Org.’s Halletts Point project (the grey buildings shown to the right).

Two large-scale developments are being planned for more than seven areas of Queens waterfront,Crain’s has learned. And along with two other massive projects—known as Halletts Point and Astoria Cove—the mixed-use complexes are set to transform part of a gritty peninsula west of Astoria into a new community along the East River.

The two sites are separately owned plots north of 26th Avenue between Second and Fourth streets. Together, they are bigger than a city block. They sit between Alma Realty’s 1,723-unit Astoria Cove project, which was approved last year, a park called Whitey Ford Field, and the 2,400-unit Halletts Point, which the Durst Organization is developing after purchasing a majority stake in the venture from Lincoln Equities.

“The important thing here is there’s an opportunity to integrate the entire waterfront in that part of Astoria,” said Jay Valgora, principal at Studio V Architecture, which is drawing up the preliminary plans for both projects.

When complete, they will fill in some of the missing pieces of a waterfront greenway that will run all the way from Astoria Park in the north down to Rainey Park in the south, a stretch of about 2.5 miles. Because the designs are preliminary, the precise density and height have not been decided, according to Mr. Valgora. But he noted whatever mixed-use projects rise on the sites would be on a scale commensurate with the neighboring complexes already in the works, which have towers topping out at around 32 stories.

In addition to the two new projects, Studio V has done the master plans for both the Durst and Alma developments, meaning the firm is almost singlehandedly redesigning the peninsula, which is also home to a public-housing project called Astoria Houses.

“We hope this can be a new model for an equitable and sustainable community,” Mr. Valgora said.

Along with thousands of units of market-rate and affordable housing, plans call for new schools, retail and amenity spaces, a ferry landing and new streets connecting the community to the rest of the borough.

Durst has also announced that the firm plans to generate its own power on-site and build a water treatment plant to ease the burden on the city’s frequently overwhelmed sewer system.

Because the two parcels are zoned for manufacturing, the owners will need to apply to the city to allow housing to be built there, which requires a trip through the public-review process. The developers and Studio V are in preliminary talks with stakeholders as to what might be built on the site.