The New York City–based Gotham Organization recently announced that it has commenced construction on a $520 million residential development encompassing nearly an entire city block in Manhattan. Spanning West 44th to West 45th streets from 10th to 11th avenues, the yet-to-be-named rental development will include more than 1,200 residential units distributed among four buildings. When completed, the development will transform a block condemned in the 1970s into a vibrant residential community, prompting Big Apple mayor Michael Bloomberg to comment publicly on the social and capital economics of the deal.
"We've always believed that the Far West Side of Manhattan has tremendous potential for providing what our growing city needs: more jobs for New Yorkers, and more affordable housing for them to live in," Bloomberg said during a development ceremony in November. "In the near future, this development will provide homes for thousands of New Yorkers, but, in the meantime, it will grow our economy by creating 2,900 construction-related jobs."
When complete, the development's centerpiece will include a 31-story luxury tower surrounded by mid-rise affordable housing properties providing 682 income-restricted housing units and a new public elementary school with a capacity for 630 students. The development will be financed primarily with tax-exempt bonds issued by the New York State Housing Finance Agency that are credit-enhanced by a syndicate of lenders led by Wells Fargo Bank. As part of the deal's structure, Gotham will contribute $20 million to affordable housing needs elsewhere in Manhattan and $15 million to partially fund the new adjacent public school. The residential units are slated for occupancy in 2014, and the new school is expected to open in the fall of 2013.
Gotham senior vice president Melissa Pianko sat down with MFE this week to discuss what it takes to rebuild an entire city block.
MFE: Hi, Melissa. What can you tell us about how Gotham came to be involved with this project?
Pianko: We were originally approached to submit a [request for proposal] to serve as the residential developer for this project back in 2005. As part of the original Hudson Yards rezoning in 2004, the community felt very strongly that this redevelopment incorporate affordable housing, at least 600 units of permanent affordable housing. We are a developer that typically likes to always include some type of market-rate housing, particularly at this scale, and we liked the idea of not only fitting in 600 units of affordable housing, but that the site could fit in plenty of market-rate units, as well.
So we came into the development with a really clear idea that this was a public–private partnership. The city obviously owned the land, the community felt very strongly about what had become a highly politicized site, and we also had to take it through a rezoning process that was going to prevent anyone from taking the site as a cowboy developer and go off doing their own thing. We started the entitlement process in 2006 and broke ground in July.
MFE: And how has Gotham embraced the desire for affordability here?
Pianko: Typical rental buildings in the city include units set aside for 50 percent AMI [area median income]. This development actually has a mandate to create middle-income housing. So we do have the 20 percent low-income housing on site required to make the bond financing work, but in addition to that, 35 percent of the units are workforce housing: units for New York City residents who make between $65,000 and $140,000 a year, which, if you think about it, is just a huge swath of New Yorkers, and they're New Yorkers who typically have been leaving the city in order to be able to afford a place to live.
MFE: This was a condemned area back in the '70s, just north of notorious Hell's Kitchen. How has the neighborhood changed?
Pianko: We totally believe in the vitality of the community and the submarket. We built our New Gotham development here in 1995, one of the first developments to come out of the past recession. Since then, there's been a tremendous amount of development: The Silver Tower project is 1,300 units two blocks to our south; we’ve got the NiMa project by Related, which is three blocks southeast. There are more and more rental housing and condo developments within three miles of our site, [that] it has really become a neighborhood, and, from an urban planning perspective, the classic use of underdeveloped existing sites. It’s got every buzzword you can think of.
MFE: And what are some of the things that are likely to draw prospects to the community?
Pianko: Part of the redevelopment will include the building of a new school. The school that was there was a 1904 building that wasn’t appropriate for 2011 students. I think the presence of a new school will also help attract residents. People in New York City have always moved to be within certain school districts. The biggest amenity of the community [itself] is the courtyard: 10,000 square feet of green, landscaped, open space. That’s unheard of in New York City.
MFE: Thanks, Melissa, and good luck!
Pianko: Thank you.