real estate: December 2007

Saturday, December 22, 2007

High hopes for latest wave of Harlem hotels

Developers are moving ahead with three as-yet-unnamed developments that they think will fill an unmet demand: 5-15 West 125th Street off Fifth Avenue; 2296 Frederick Douglass Boulevard between 123rd and 124th streets; and 233-237 West 125th Street, the old Victoria Theatre at Seventh Avenue.

"Over a million people visit Harlem a year," said developer Paul Reisman of New Jersey-based Reisman Properties, which is building the hotel at 5-15 West 125th Street, "and there is no meaningful lodging facility to accommodate them."

Demand for lodging in Harlem is currently being met though a variety of small establishments, said Tamara Marotta, principal broker for the Marotta Group, a leading real estate agency in Harlem. "We have seen many bed-and-breakfasts, apartment-style rooming house/hotel conversions and modern high-end youth hostels in the neighborhood in order to deal with the demand, but no boutique hotels yet."

Room rates for the new hotels have not been set, but developers may be able to draw tourists priced out of more expensive hotels in Manhattan, where according to Atlanta-based PKF Consulting, the average room rate is $276.58 per night.

If the idea of luxury hotels making their way to Harlem feels familiar, it should. The buzz about Harlem hotels began back in 2003, with a symbolic groundbreaking ceremony -- featuring both the mayor and the governor -- for Harlem Park at 125th Street and Park Avenue. That much-talked-about $236 million development included a proposed 34-story building with office space, condos and a Marriott hotel. The project would have been the first new major hotel in Harlem in 40 years, and it promised to bring 2,500 jobs in a prime location, next to the Metro North station at 125th Street.

But the proposed 2006 opening date passed with no major progress while the developer, Michael Caridi, was indicted on felony charges for allegedly defrauding HUD on another development. Caridi, who declined to address why Harlem Park stalled, sold the property later in the year to Vornado Realty, which now plans to build a 21-story office building on the site. "We're not in the hotel business," said project manager Barry Langer.

As a result of this kind of ill-starred development, many in the neighborhood, including state senator Bill Perkins (D-Manhattan), have come to consider hotel projects the "old bait and switch" -- meaning developers purchased a parcel, got the authority to build a certain type of property at a certain height and then flipped the land, increasing the value of the property without actually bringing any development to the community.

Builders of the new projects, however, are encouraged by the increase in tourists visiting the area, which include many Europeans, architectural buffs admiring the untouched McKim, Mead and White 1890s townhouses on Strivers Row, and various travelers who want to sample the flavors of Sylvia's soul food and the sounds of the Apollo Theater.

According to the community group New Harlem, tourism in Harlem is up 20 percent from last year, with the number of annual visitors reaching more than 1 million. And 65 percent of tourists list Harlem as one of their top three "must-see spots" while visiting New York.

At 5-15 West 125th Street, Reisman will finish construction on a full-service, 252-room hotel by the end of the year; the hotel has a January 2010 completion date. The 18-story property will feature 20,000 square feet of conference rooms, 10,000 square feet of outdoor terraces, a high-end 120-seat restaurant and a third-floor pool, lounge and café.

Reisman has yet to finalize an official hotel partner, if he indeed picks one. "We may run it as a boutique hotel or affiliate with a higher-end flag," he said. "That decision will be made within the next six months."

The development is being designed by Handel Architects (the architects behind the Ritz-Carlton Downtown and the Trump Soho Hotel Condominium New York as well as 40 Bond Street).

Also checking into the Harlem scene is the development at 2296 Frederick Douglass Boulevard, the site of a former Associated Supermarket purchased in February 2007 for $3.9 million.

Shlomo Levy of Hotel 124 LLC is the official owner. Shuster Management is currently the developer, although it might not be for long. "We are still considering it," said Tali Israeli, Shuster's vice president of operations.

At one time, Shuster had teamed with Starwood Hotels -- owners of the "W" and "Aloft" brand hotels -- and planned to build an Aloft on the site. (According to a page on the Shuster Web site that has since been removed, the "ground-up, mixed-use project of 137,000 square feet will be used as a high-end residential condo project and ... 120-key Aloft hotel.") However, according to Roxanne Rabasco, Starwood's senior manager of public relations, Starwood has "no confirmed projects for Harlem."

Construction has been ongoing since this summer, according to the Department of Buildings, so it looks like Hotel 124 is looking for a new flag or developing it themselves as a boutique property.

The third hotel project in Harlem -- one that has been talked about since 2004 -- is the redevelopment of the old Loews Victoria Theater at 223-237 West 125th Street, on Seventh Avenue next to the Apollo Theater. In October, the Harlem Community Development Corporation and its parent company, Empire State Development, which have owned the property for years, voted to designate Danforth Development Partners LLC as the conditional preferred developer of the project.

Danforth is known for its reconfiguration of the United House of Prayer, a Pentecostal church on 125th Street, and a studio for music mogul Sean Combs in Midtown West.

Danforth's hotel proposal also includes condominium residence units and cultural arts space for the Classical Theatre of Harlem, the Harlem Arts Alliance and the Jazz Museum in Harlem.

In good company

The hotel developers are following in the footsteps of many national retailers who have made their way to Harlem to open shop, including Starbucks, New York Sports Clubs and Bank of America.

Bed Bath & Beyond, Macy's, Target, Best Buy and Home Depot are scheduled to open stores in 2008.

Residential growth, including luxury condos, has also come to the neighborhood. According to Jonathan Miller of the appraisal firm Miller Samuel, the average price per square foot for Central and East Harlem condominiums rose 39.5 percent between 2005 and 2006, the biggest increase for a neighborhood in Manhattan.

Also encouraging to developers is a proposed rezoning of 125th Street, first discussed in 1993, that may finally get approval. The plan, which would allow for increased density, more mixed-use and commercial properties, taller buildings and more crosstown transportation, is expected to be passed in the spring of 2008.

And with fewer undeveloped parcels left in Manhattan, Harlem makes sense.

"There isn't a lot of room to build in Midtown," said Adam Weissenberg, a managing partner of the U.S. tourism, hospitality and leisure practice at Deloitte & Touche. "Hotel developers are seeking opportunities in nontraditional areas of the city such as Harlem."

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D'Amatos revise proposal for Atlantic Beach condos

Former Sen. Alfonse D'Amato, his brother and son, have filed a revised version of their controversial plans to build 100 luxury condos at The Sands in Atlantic Beach.

The move comes four months and an election after the town rejected the plans on a technicality: the D'Amato proposal included a tiny piece of property owned by the town.

In the amended filing, the D'Amatos -- operating as Deb Steve Development -- said the parcel was deeded to Hempstead Town in 1984, for a traffic light at the land's entrance. They said it's been used by the current and former owners and should continue if they get the approval and buy the property.

In May, the group filed a request to change the zoning from marine recreation to multifamily residential, so that developer Engel Burmann could build 20 five-story buildings, a pool and community center. Currently, a catering hall is on the site.

Residents in the tiny oceanfront community are opposed. The D'Amatos declined to comment.

"We don't see that this change in the application is in any way significant to us or would any way cause us to change our opinion about the project," said Steve Mahler, mayor of the Village of Atlantic Beach.

Hempstead Councilman James Darcy (R-Valley Stream), said the town board created the special zone in 1987 to prevent development along the beach.

"Any plans that come before the board are going to be looked at very closely to see why this board should deviate from the 20-year history," he said.

The D'Amatos have not scaled back the number or size of the buildings in the revised plans, which were filed with the town on Monday. They did, however, increase the number of parking spaces, from 233 to 243 for the 100 units.

The total area to be rezoned went from 12.16 acres to 13.96 acres, to include the 1,500-square-foot town-owned parcel. The group also submitted revised surveys and maps, prepared in late August by a new engineer.

Also in August, the adjacent Lawrence Beach Club filed a formal protest with the town citing state law that would require a supermajority, six of the seven town board members, to approve the D'Amato plan.

Supervisor Kate Murray has already voiced her opposition to the original proposal.

source: newsday.com

Developers Envisions 'a Bit of Florida' in South Brooklyn

Stephen Jemal has been buying up small parcels on the South Brooklyn waterfront for the last decade with an eye toward building housing that echoes the beachfront properties of Florida. Now, with a large new loan in hand, he can finally start construction.

Mr. Jemal's company, SSJ Development, which received a $100 million construction loan from Amalgamated Bank earlier this year, will break ground on two projects next month and a third next year in a distant part of Brooklyn dotted with low-rise homes and crumbling docks.

"These are great neighborhoods, but their waterfront is totally abandoned and blighted," said Mr. Jamal, who was the owner of the electronics store Nobody Beats the Wiz before closing the business in 1997. "I want to bring a bit of Florida to New York. … In these developments, you will be able to sit on the dock of the bay, so to speak."

Mr. Jamal will start work in January on 10 single-family homes with price tags of $2 million and up in Mill Basin, as well as 18 apartments starting at $599,000 in a building in Sheepshead Bay.

An avid water sports and boating enthusiast who grew up in Brooklyn, Mr. Jemal said he scopes out potential development sites from his 21-foot speedboat.

source: nysun.com

Columbia Expansion Gets Green Light

The New York City Council cleared the way Wednesday for the largest expansion in the history of Columbia University. The university plans a $7 billion project over the next 25 years that will transform a section of Upper Manhattan now dominated by warehouses and auto body shops into a campus with glass-walled high-rise buildings, tree-lined thoroughfares and student dormitories.

“The university’s expansion is critical,” Deputy Mayor Daniel L. Doctoroff said, “because the success of this city in the future will be a function of us having a diversified economy, and having science and technology as a key component of that diversity.”

A month earlier than expected, the City Council voted 35 to 5 with 6 abstentions and 5 absences to rezone a 35-acre swath of Harlem from light manufacturing to mixed use. Columbia has said it plans to extend its campus onto 17 of the rezoned acres, bounded roughly by Broadway on the east, Riverside Drive on the west, West 129th Street on the south and West 133rd Street on the north. Columbia now occupies about 36 acres ending about 5 blocks to the south.

All but about three buildings will be torn down to make room for the new campus, which Columbia officials said would eventually include many of the university’s science and research laboratories.

While the rezoning removes the last significant hurdle to the university’s expansion, some elements of the plan remain to be settled, including whether the university will seek to use the power of eminent domain to force the removal of commercial property owners who have so far refused to sell to Columbia.

City officials said the university has tentatively agreed to spend $150 million as part of a community benefits agreement that will contribute to providing low- to moderate-income housing and expanded educational opportunities.

Still, the expansion is bitterly opposed by some in Harlem who have objected to the potential use of eminent domain. Others fear that the residents of some of the last working-class neighborhoods in Manhattan, which lie to the north of the expansion zone, will be displaced by students and administrators who can pay far more than the typical neighborhood resident.

“I’m sure there will be lawsuits coming out of this, but we will continue to try to get Columbia to be a good neighbor,” said the Rev. Earl Kooperkamp, rector at St. Mary’s Episcopal Church, who is opposed to the expansion.

The university owns about 90 percent of the private property in the 17 acres. The Metropolitan Transportation Authority and Con Edison also own some of that acreage.

Opponents said they were surprised to learn that the City Council had voted Wednesday even though several council members said they had been told the vote would be in January.

“I don’t think we should rush to give Columbia University a Christmas present,” Councilman Charles Barron said before he voted against the plan. “We’re here to support the people’s right to participate in this process.”

Many council members dissented or declined to vote, saying they opposed what they said had been a rushed approval process and the possibility that eminent domain would be used.

About two dozen protesters sat in the balcony throughout the hearing.

Council Speaker Christine C. Quinn said the plan would solidify the city as one of the world capitals of higher education and hailed the jobs the project is expected to create. “That’s something that is a benefit to our city at any time, but given the dark economic times that are on the horizon is incredibly important right now,” she said.

The university has said the expansion is necessary if it is to remain competitive with its Ivy League peers, including Pennsylvania and Harvard, which are in the midst of expanding or are considering expansions.

Only this year Yale acquired a 136-acre pharmaceutical company site near New Haven, including state-of-the-art laboratories, that the university said would hasten its progress in science research by 10 or 15 years. Harvard has begun work on a new science complex on its new 300-acre site in the Allston neighborhood in Boston.

Columbia has also made a new science complex a priority. It plans to build a center for research on the brain and neurosciences as part of its first phase. Also in the first phase are a new home for its School of International and Public Affairs, a new site for its business school, and one for its School of the Arts.

Also as part of that phase, it says it plans to provide open space for the community and the university and a permanent site for the new, university-assisted public secondary school for math, science and engineering.

source: nytimes.com

Former American Home Mortgage workers struggle to find work

Every morning for nearly six months, Robin Rosenberg has started fresh at the computer in her Farmingdale apartment. She checks job-hunting Web sites for new postings, sends out resumes and letters of inquiry and makes phone calls. She is not particular about what field her next job will be in, and she's willing to take a $8,000 pay cut from her most recent salary.

But that's not enough, Rosenberg said, because she is one of the more than 2,300 financial industry workers on Long Island who have lost their jobs since October. She was laid off from her job in American Home Mortgage's loan sales department on Aug. 3, the same day the company abruptly terminated about 1,500 local employees.

"I know I could go into almost any job in any company and do a fantastic job, because I'm diligent, I'm a hard worker and I'm willing to learn," Rosenberg said. "But no one wants to give me that chance."

At 45, Rosenberg had been in the mortgage industry for 10 years and in lending for 20, but she is confident her skills could work in another industry, if only the job market wasn't so competitive.

For Dom Whelan, American Home's failure was a family affair. The 28-year-old had worked there almost five years. His mother, Susan, also an American Home employee, had been in the mortgage industry for 25 years; and his brother, Matthew, worked there as well.

None has found permanent employment yet, and he estimated that 75 percent of the former colleagues he's still in touch with are out of work.

Like Rosenberg, Whelan has spent months job-hunting on the Internet, approaching local companies and going to job fairs, which he said look like a "high school reunion."

By now, Whelan is frustrated. "I can send my resume to 1,000 different places," he said, "but you always have to know someone."

After mass layoffs at American Home, Woodbury-based Delta Financial Corp. and numerous other mortgage-related companies both large and small, Whelan and Rosenberg feel strongly that there are simply too many job seekers for every position available -- even for those who are flexible about salary and willing to change fields.

They are not alone. Employers in related fields report seeing so many applications for each opening that they are forced to turn away highly qualified candidates.

But Pearl Kamer, chief economist for the Long Island Association, said the anecdotal reports don't reflect the broader picture: Long Island actually suffers a labor shortage, she said, and unemployment remains low, 3.6 percent in October.

That means "anybody who was laid off and who has a decent set of skills ... will be picked up quite quickly," Kamer said. She said Long Island could face economic hardship if unemployment rises and other industries falter. But for now, Kamer said she believes there are enough jobs to go around.

Gary Huth, the state Labor Department's principal economist for the Long Island region, agreed, calling the mortgage industry layoffs "a blip" that has largely been absorbed.

Shelley Domotor would seem to be a case in point. At 62, she had moved to Melville from Dallas so shortly before American Home's bankruptcy that her furniture hadn't even arrived when she lost her job. But for Domotor, an enthusiastic and immediate job search paid off: Within six weeks, she had landed a position in regulatory compliance at Vertical Lend, a Melville-based company specializing in reverse mortgages.

But Domotor said that after 24 years in the mortgage industry, including three major downturns, she knows finding a new job is largely "the luck of the draw -- being in the right place at the right time."

Out of the eight or nine former colleagues she talks to, she said, six are still looking for work. They will have exhausted their unemployment benefits by the end of January.

She said leaving the business is not as easy as it sounds.

"The mortgage industry gets in your system," she said, in a way that outsiders don't understand. They also have trouble understanding some of the quirks that may surface on her less fortunate friends' resumes, she said.

"People outside of the mortgage business looked at my resume and said, 'Why have you had so many jobs?' But for us that's normal," she said.

Jonathan Pinard, head of the Empire State Mortgage Bankers Association, said, "It's really hard to get out of the mortgage business after you've been doing it for a long time. We are all creatures of habit, and we do get specialized."

For Joseph Willen, the layoffs have presented a great opportunity. Willen is president of the Advantage Group, a diversified, Huntington Station firm with operations in title insurance, foreclosure, settlement and mortgage origination.

"If we put an ad in the paper, we're flooded with calls and resumes," Willen said. "There were times in the past where we would hardly get any."

But he said he has turned away numerous qualified applicants, and he knows it's a buyer's market.

"Let's face it," Willen said. "It's supply and demand. From an employer's perspective, it's a really good situation to be in ... but job-seekers don't have the hammer right now -- the employers do."