Thursday, May 31, 2012

Loews Regency Plans $70M Hotel Renovation

Loews Corp. plans a $70 million renovation of the Loews Regency Hotel New York, a 354-room luxury property at the corner of Park Avenue and East 61st Street, as the company focuses on an expansion of its hotel division in Manhattan.

The upgrades should be completed by February 2014, when the National Football League's Super Bowl will be held at MetLife Stadium in nearby East Rutherford, N.J. The venue is the shared home of the New York Giants, which is 50%-owned by members of the Tisch family, Loews Corp.'s founders.

The Regency renovation, which will be done in stages to avoid service disruptions, is part of an initiative to overhaul and bolster Loews's hotel business, its smallest unit. Loews Corp., the New York-based insurance and energy holding company, plans to more than triple the hotel division's net income by the end of 2015 and increase its hotel count from 18 to about 30.

It is widely expected that the company will make a major acquisition in Manhattan by the end of this year, as Loews is willing to pay more than $500,000 a room for properties in New York City. The company is expected to boost its number of hotels from one - to as many as four- by next year.

Outside of New York, Loews is looking to pay as much as $400,000 per room for hotels in major cities, and the company expects to complete three acquisitions and announce one ground-up development before year's end.

The CEO is looking for high-end hotels that are in need of renovations and cater to business groups and corporate travelers, such as the Renaissance Hotel & Spa in Hollywood, which it bought from CIM Group last week. Loews will have a heavier focus on individuals to balance out a drop in group bookings during economic slowdowns.

The hotel division contributed $4 million to Loews Corp.'s $367 million of net income in the first quarter of this year, according to a filing with the U.S. Securities and Exchange Commission.

Loews Hotels is ultimately aiming for a similar business model and portfolio size as Four Seasons Hotels Inc. and Marriott International Inc.'s Ritz-Carlton brand, with about 60 to 70 properties.

Wednesday, May 30, 2012

'One Hudson Yards' Tower Set To Soar

Extell Development is reviving a long-dormant, $1-billion West Side project — and has named it “One Hudson Yards” - even though it’s not associated with the $15-billion Hudson Rail Yards project, presently under development by the Related Cos.

Extell has tapped Jones Lang LaSalle to find tenants for the 56-story, 1.7 million square office tower to rise on the east side of 11th Avenue between W. 33rd and 34th streets. The project was first announced in 2009, when Extell was to collaborate with Israel Green on what was then called the World Product Center.

However, plans for the arresting, Kohn Pedersen Fox-designed tower went on hold. Extell and Green parted ways and the site is today an empty lot.

Now, Gary Barnett is again itching to build. “We believe we have the best location in the area, on terra firma [rather than above a rail yard]. We’re right at the new No.7 line subway station, at the foot of a new park and across from the Javits Convention Center,” he said.

Barnett will not start construction without pre-leasing half the tower — “at the rents we’re going to charge, it would be suicidal,” he said. Asked what the rents might be, he said with a laugh, “Between $50 and $100 a square foot.”

Related Cos. is the designated developer of the Hudson Yards rail site bounded by 10th and 12th avenues and West 30th-33rd streets. Extell’s site is just north of it in what city officials call the Hudson Yards "area.
Related chief Stephen Ross fumes, “I don’t know why they are trying to deceive tenants and the public.”

Barnett said he’s cooperated closely with the MTA on the new subway station and helped the agency assemble the site. He said station construction also put in place some of the foundation for his tower, which will reduce Extell’s cost and allow it to build swiftly.

Extell Development has the ability to begin vertical construction by the end of this year, and the ability for tenants to begin their build outs in 2015.

Extell owned the site for years, long before the No. 7 line extension project came along. Then, lo and behold, the site falls at the foot of the Hudson Yards train stop - the only train stop there is going to be. The station with an undulating entrance canopy by Toshiko Mori is to open in 2015.

Monday, May 28, 2012

Green Light for Bronx Hospital Expansion

A state Department of Health planning committee approved a $5.3 million expansion of the city-run Lincoln Medical and Mental Health Center in the Bronx. In May 2011 the Health and Hospitals Corp. had submitted a certificate of need to build a 30-bed, 12,000-square-foot expansion on the top floor of the 10-story hospital at 234 East149th Street.

Mental health advocates say the city is experiencing a shortage of inpatient psychiatric services thanks in part to the closure of three local hospitals. Cabrini Medical Center closed in 2008, and in 2010 St. Vincent's Hospital went under, as did North General Hospital's acute-care facility in East Harlem.

The units will be earmarked for adult psychiatric patients, according to the Health and Hospitals Corp, something advocates say the city sorely needs.

Since 2010, Bellevue Hospital created a round-the-clock psychiatric unit for children and expanded its children's psychiatric ward. Also in 2010, the New York State Office of Mental Health and the Office of Children and Family Services unveiled a program in Brooklyn for youth with mental health problems.

With this approval, the larger Lincoln center would double the hospital's capacity to 60 beds. The hospital estimates that it needs between 47 and 57 beds in order to operate at an 85% level.

Construction is scheduled to begin in mid-July and end by December. The costs include $3.2 million for construction and $1.3 million for renovation and demolition. The project will be funded by a HEAL-NY Phase 18 grant.

There are currently 2,929 psychiatric beds in New York City's public and private hospitals, and another 282 in private mental health facilities.

Advocates for the mentally ill say that demand has long been growing and that adding 30 beds does not go far enough. According to a 2010 report from Arlington, Va.-based Treatment Advocacy Center, a mentally ill patient in New York is more likely to end up in jail than in a hospital. The center estimated the state is short 4,300 psychiatric beds.

Sunday, May 27, 2012

2015 Opening Seen for World Trade Center Retailers

The first shops could throw open their doors in the redeveloped World Trade Center by March 2015, Australian mall operator Westfield said on Monday, 13-and-a-half years after the New York landmark was destroyed in the September 11 attacks.

The redevelopment of the World Trade Center is years behind schedule and billions of dollars over budget. After years of negotiation, Westfield Group signed a deal with the Port Authority of New York and New Jersey for a $1.25 billion joint venture to lease the retail space at the World Trade Center.

Westfield, one of the world's biggest mall owners, said the first retailers for the redeveloped site could be announced by the first half of 2013, with an opening date set for March 2015.

Westfield Co-Chief Executive Peter Lowy said 352,000 sq feet of shopping would be spread over three above-ground levels and two below ground.Westfield is also entitled to operate another 90,000 sq feet of retail space among the 8.8 million sq feet of office space under construction.

The stores will cater not only to the people who will live and work at the World Trade Center, but also to the masses of tourists who visit the National September 11 Memorial Park and Museum, as well as the proposed performing arts center.

The above-ground retail will be housed in 4 World Trade Center, which is under construction, and inside 3 World Trade Center, which is still in the planning stage. Most of the retail will be inside the Transportation Hub, a central stop for 13 train lines.

Westfield operated the hugely successful underground mall at the World Trade Center before selling its interest to the Port Authority after the September 11, 2001, attacks.

In February, an independent audit ordered by the governors of New York and New Jersey, who share control of the authority, found that the cost of the World Trade Center redevelopment had soared by $3.8 billion to $14.8 billion.

Saturday, May 26, 2012

Brooklyn's Fulton Mall Transforms into City Point

The transformation of Fulton Mall from a Downtown Brooklyn den of cheap cellphone outlets and fast-food joints the more upscale City Point shopping hub is set to take a significant step forward with a deal to open a Century 21 Department Store.

The popular discount retailer would provide a high-profile anchor for the City Point development, a mix of mostly retail and apartments that is one of the largest projects under way in Brooklyn.

It would be the first new traditional department store to open in Downtown Brooklyn since the area slid into decline in the 1970s. Now there’s finally word that Century 21 will be the anchor tenant for the first phase of City Point in Downtown Brooklyn.

The retailer doesn’t intend to open in the location until fall of 2015, but notes that it is set to be twice as big as its Upper West Side location. The transformation we’re witnessing of the Fulton Mall—and the larger Downtown area—is nothing shy of historic for Brooklyn.

The agreement cements City Point’s developers’ ability to start moving forward on the second phase of the project this summer: 675,000 square feet of retail and commercial space and 690 new market-rate and affordable’apartment units at Dekalb and Flatbush Avenues.

City Point's third phase, includes what is slated to be the tallest residential tower in Brooklyn.

Friday, May 25, 2012

New Multiplex Cinema Under Construction In Williamsburg

Early in 2010, developer Blue Zees Real Estate announced plans to build a $9.3-million movie theater at the corner of Driggs Avenue and Grand Street in Williamsburg, Brooklyn. Finally, after twenty-six months, construction is under way.  

The theater, Williamsburg Cinemas, will be a multiplex—with seven theaters and stadium seating— but the developer says that you shouldn't call it that: "We won't be a true multiplex," claims owner-operator Harvey Elgart.

You can see renderings of the site on the website listed on the billboard. The theater will be independently owned, and Elgart says it will have similar mix of first run blockbusters and foreign films as one of Elgart's other ventures, Cobble Hill Cinemas.

He hopes to be done with construction by late 2012. This is only the latest movie theater to try to make it in the area—from the mythical Cassandra Cinemas to now-beloved neighborhood institution Nitehawk.

Thursday, May 24, 2012

Breaking Into Brooklyn's Industrial Waterfront [Video]

Brooklyn has many monuments regular folk don't get invited into on a regular basis—and of those, the Domino Sugar plant that anchors the endangered Brooklyn Industrial waterfront looms large. Though it is eventually going to go residential, the area remains out of reach for most of us for now - Unless of course you are willing to climb some fences.


Wednesday, May 23, 2012

Little House on St. Marks Place About to Get Huge

When the ragged little row house at 355 St. Marks Place (between Washington and Grand) changed hands last fall, it looked as though it was about to get a welcome gut renovation. Turns out the owner has bigger plans for 355 – MUCH bigger.
The three-story building – the smallest on the block – had been occupied by a bottle and can collector and appeared to be just this side of condemnation.

This week, a number of orange surveyor marks appeared on the west wall of its much larger neighbor at 357 St. Marks Place. Checking with the NYC Department of Buildings for recent filings shows a huge expansion to a five-story, four apartment building that’s 20 feet taller and more than triples the building’s floor space from 2,576 to over 8,000 square feet.

The architect of record - Mozer Architect Design of Gravesend, Brooklyn -specializes in the sort of frosting-covered, out-of-context cartoon buildings that make you stop in your tracks and wonder “what the heck happened here?"

Monday, May 21, 2012

Eaton To Buy Cooper Industries for $11.8 Billion

Diversified industrial manufacturer Eaton Corp struck a deal to buy electrical equipment maker Cooper Industries for $11.8 billion in cash and stock and said it would shift its incorporation to Ireland to save on taxes. Analysts said acquisitions are one way for companies to grow in a sluggish global economy.

The deal, Eaton's biggest ever, will allow the company to offer a broader range of electrical products, such as lighting and wiring devices, to markets ranging from mining to oil and gas and utilities, and help it expand in emerging markets while cutting costs.

Cleveland, Ohio-based Eaton will pay $72 per share for Cooper - $39.15 in cash and the rest in stock. Eaton shareholders will control almost three-quarters of the new Eaton Global Corp Plc, and administrative headquarters will remain in Ohio.

Incorporating in Ireland will shave about $160 million off Eaton's annual tax bill, said Chief Executive Sandy Cutler, who will lead the combined company. But he said synergies, not tax reduction, were the primary motivation for the deal.

When Cooper incorporated in Ireland last decade, it was one of several U.S. industrial companies, including Ingersoll Rand and Tyco International, that picked either Ireland or Switzerland to help lower their taxes.The tax component of the Eaton-Cooper deal is unique and is unlikely to be replicated by other companies.

Re-incorporation is a legal move that rarely has any bearing on where a company's headquarters are located. U.S. companies have been re-incorporating in Ireland and Switzerland in recent years, instead of the offshore tax havens of Bermuda and the Cayman Islands, reasoning that Ireland and Switzerland offer better protection from U.S. tax claims than small countries that are more dependent on U.S. goodwill.

The deal could spur more consolidation in the electrical equipment industry. Increased demand for electronics and retrofits to improve energy efficiency is prompting multi-industry companies such as Eaton and ABB Ltd. to expand their electrical equipment offerings.

Swiss engineering group ABB bought U.S. electrical components maker Thomas & Betts in January for $3.9 billion to ramp up its presence in the world's largest market for low-voltage products.

Analysts have said electrical products makers Hubbell Inc. and Acuity Brands Inc. could be attractive targets for industrial conglomerates such as France's Schneider Electric and Germany's Siemens AG.

More room for consolidation remains in the industry. The obvious one everyone is looking to is Hubbell. Hubbell is a mini Cooper - it's got a similar business mix, with Emerson Electric and Schneider as potential buyers.

Century-old Eaton makes power systems for data centers, hydraulics used in machinery, and truck transmissions. It recorded 2011 sales of $16 billion. It has stepped up acquisitions in recent years, closing nine deals last year.

Cooper, based in Dublin, had 2011 sales of $5.4 billion, with most of its sales to utilities and industrial markets. Its products include safety systems, lighting, circuit protectors and wiring devices used in homes and commercial buildings.

The Cooper acquisition will reduce Eaton's costs by $260 million a year by 2016, while adding $115 million a year to revenue.

Sunday, May 20, 2012

AvalonBay's Much Anticipated $275M Project Gets Underway

At the northeast corner of 28th Street and 11th Avenue, near the High Line, work continues on what will be the future Avalon West Chelsea. The building at 517 West 28th St is set to peak at 31stories on the corner and taper back to 13 stories mid-block.
In February 2012, after almost three years of planning, AvalonBay broke ground on its exciting West Chelsea apartment community. Like every one of AvalonBay's eight existing New York City apartment buildings, the West Chelsea development promises to be a desirable addition to the neighborhood, providing luxury rental housing, local economic benefits, affordable housing units, and the revitalization of a neglected area.

The 710-unit apartment community consists of two buildings (31 stories and 13 stories) with two lobbies.
The buildings, which will be known as Avalon West Chelsea and AVA High Line, will be located between 28th and 29th Streets, between the High Line and 11th Avenue.

The development is just steps away from the neighborhood's popular High Line Park, which opened in segments between June 2009 and June 2011 and has sparked renewed interest in residential living in a long-time commercial area.

The styling and architecture will be consistent with the "Chelsea experience", appealing to renters interested in a variety of amenities and high-energy, vibrant buildings.

The building's ground floor will be home to 21,000 square feet of retail space, ideal for grocery stores and/or restaurants. Twenty percent (20%) of apartments will be affordable under New York City's inclusionary housing program, thus ensuring the continued diversity of the Chelsea district.

The apartment community is expected to be completed by late 2014, with first apartment home deliveries in 2013.

Saturday, May 19, 2012

Unique Carousel Under Construction in Battery Park

A new aquatic-themed carousel that will feature dozens of giant fish in the place of carousel horses is rapidly taking shape in Battery Park. Set to open in the spring of 2013, the $16 million SeaGlass is an educational ride designed to immerse visitors in the sights and sounds of the ocean.

By the late fall, a domed structure rising above the turntable will house 30 fish sculptures, created by George Tsypin, who designed "The Little Mermaid" for Broadway. The luminescent fish will stand more than 9 feet tall and will glow with internal LED and fiber-optic lights. In the center of each fish, Tsypin is carving out a space so visitors can sit inside.
During the ride, which will last about 3 minutes, SeaGlass will reverberate with music scored to resemble deep underwater sounds, and projections of fish swimming through New York Harbor will flit across the walls.

The carousel has three interior turntables in addition to the one large one, which will give riders a sense of gliding freely through water rather than just rotating in a circle.

SeaGlass is designed to recall the original New York Aquarium, which opened in Battery Park's Castle Clinton in 1896 and drew millions of visitors before closing in 1941.

The Battery Conservancy is working with the aquarium, now based in Coney Island, to develop educational materials about the fish and the harbor, to enhance the experience for school groups.
But SeaGlass will also be open into the evening, and Price hopes adults will give it a spin as well.

SeaGlass is just one piece of a major redevelopment of Battery Park that is entering its final stages this year. By the end of 2012, 97 percent of the 25-acre park will either be under construction or will have been completed.

One of the biggest projects is the Battery Green, a three-acre open space for which construction will begin this summer, once the World Trade Center sphere sculpture is moved. The oval-shaped lawn will host gatherings for up to 8,000 people, and the conservancy plans to launch an international competition this summer to design chairs for the space.

Other plans include a new bikeway around the park's perimeter and a Frank Gehry-designed playground.

Friday, May 18, 2012

Apartments, Hotel Proposed for Hudson River Park

The nonprofit trust managing the financially struggling Hudson River Park has identified a possible solution to its problems. Building 800 apartments and a 150-room hotel on crumbling Pier 40, the park's prime commercial asset, offers the best chance to raise the funds to keep the five-mile ribbon of park above water.
The study, commissioned by the trust, explored a range of options for Pier 40 with an eye toward identifying ones that would produce the most revenue with the least amount of traffic. It comes at a time when the park's bank account is quickly dwindling in the wake of two successive years of budget deficits.
Without an influx of cash, the park will exhaust its reserve fund in less than three years.

Meanwhile, roughly $118 million is needed just to make basic repairs to Pier 40, a nearly 15-acre expanse with ball fields and a 775,000-square-foot building that holds offices, sports facilities and a parking garage.

Last month, most of Pier 54, about 18 blocks north, had to shut down because it was in danger of collapsing. Pier 40 may need to close as soon as 2014 if there's no new cash infusion. Meanwhile, nearly a third of Hudson River Park has yet to be built—a task that would require another $200 million.

The situation has grown so dire that community groups may be more open to various moneymaking proposals. Community opposition squelched two earlier plans to develop Pier 40.

The financial dilemma has pushed the board of Friends of Hudson River Park, originally formed to advocate for more government money, to switch its focus to private fundraising. Six new deep-pocketed members joined last month.

Much of the park's fate will ultimately hinge on whether the trust can persuade state legislators to amend the 14-year-old law that created the park to ease development and lease restrictions so Pier 40 and other facilities would attract tenants that would generate more substantial revenue. Currently, building residences, hotels and offices is prohibited, and the lease term is capped at 30 years, which makes it unattractive to developers. The new study said the ideal lease term would be 87 years.

By tearing down the existing building on the pier and replacing it with a 150-room hotel, 800 apartments, parking facilities and retail shops, the property could generate from $9 million to $20 million a year. The complex would be 1.1 million square feet, roughly 45% larger than what is there now, but it would leave as much as 80% of the pier's space open. Currently, only 50% of the pier is open space.

The idea of constructing housing on the pier has already triggered concerns about the privatization of public land and whether the housing will be affordable. Yet some activists now say the idea merits discussion, noting apartments will add far less traffic than other alternatives, such as entertainment venues.

Thursday, May 17, 2012

$270M Plan To Get Moynihan Station Underway

Plans to expand New York City's famous Pennsylvania Station, the busiest passenger rail facility in the United States, will begin later this year with a $270 million project to improve access to underground passenger platforms.

The project will be the first phase of the long-delayed Moynihan Station, an ambitious effort to regain some of the grandeur lost when the original Pennsylvania Station was torn down in the early 1960s and replaced by the Madison Square Garden arena.

When the entire project is completed, the adjacent James A Farley Post Office, which resembles the original Penn Station and is just across Eighth Avenue, will become a new passenger facility. The long tracks and platforms under Penn Station already extend under the J.A. Farley building.

Skanska has been awarded a $148 million contract to add two street-level entrances, one each at the 33rd Street and the 31st Street sides of the post office, to the platforms below. The company will also widen and extend an underground concourse to help passengers reach the three railroads that use Penn Station: New Jersey Transit, Amtrak and the Long Island Rail Road.

The remaining $122 million of the first phase will be spent on a ventilation system and an underground walkway to Penn Station. Funding for the first phase is coming from the federal government and other sources.

Officials said the first phase should be completed in 2016, with the next phase creating a new passenger terminal in the Farley building that will be six stories high and topped by a glass skylight. It will cost $500 million.

Phase Two is unfunded, however, and talks with the developers, Related Cos and Vornado Realty Trust, are ongoing.

The Moynihan Station is so named because it was promoted by the late U.S. Senator Daniel Patrick Moynihan in the late 1990s.

Wednesday, May 16, 2012

Hopes are dashed for WTC beacon, ‘Tallest in NYC’ title

Forgotten in the flap over whether a design change will cost 1 World Trade Center its status as the nation’s tallest building is the loss of a symbolic New York gesture. A flashing light — or “architectural beacon” — atop the tower that was to spell out “New York” in Morse code has been changed to a simple blink.

“The original design intent was to have the beacon act as a symbolic lighthouse for New York harbor [and the world] flashing ‘N’ in Morse code [dash-dot],” said Jordan Barowitz, a spokesman for the Durst Organization. “The design has been altered to a dot-dot to project the beam as far and bright as possible.”

The light itself is actually a cluster of hundreds of LEDs that focus onto a spinning mirror. While the LED lights that will illuminate the 408 foot-tall mast will be able to change color, the beacon will remain white.

An FAA-mandated red beacon will be placed above this spinning blinking white light, which has preliminary approval from the FAA, according to Barowitz.

The original design called for the antenna needle to be enclosed in a steel-and-fiberglass structure called a randome — short for radar dome.

The Dursts made the decision to remove it when they determined that replacing the fiberglass panels would be a maintenance nightmare. Without it, however, the bare antenna may not count toward the building’s height.

The mast atop the Empire State Building counts towards its overall height, while the antenna on the roof of 1WTC will NOT COUNT towards its originally planned height of 1776 feet.

This would push its ranking down under the Council of Tall Buildings and Urban Habitat standards to less than that of the Willis Tower and Trump International, both in Chicago. And way under increasing numbers of buildings around the world.

Tuesday, May 8, 2012

Major Times Square Redesign to Begin this Fall

Forget painted blue walkways and multicolored beach chairs. The Times Square of the future will feature dark, concrete flooring punctuated by small metal rivets designed to bring some of the grit back to the Great White Way, according to a multi-million-dollar redesign that will soon get underway.

The plan, which will officially cement the plazas as permanent structures, calls for the leveling of surfaces across the plazas from 42nd to 47th street to create a continuous pedestrian space, with no vestiges of the old curbs and sidewalks that used to mark the roadway.

“We want to remove the ups and downs and make it simpler and flatter,” said Craig Dykers, an architect with Snohetta Design, who gave members of Midtown Community Board 5’s Transportation Committee a sneak-peak at the $27 million preliminary plan on behalf of the city’s Department of Design and Construction.

Snohetta is also the team behind the 9/11 Memorial Museum at the World Trade Center site.
Under the proposed design, the ground surface of the plazas would be made from two tones of dark concrete pavers, arranged in an alternating brick pattern to differentiate it from a regular street. Some sections would also feature embedded stainless steel “pucks” about the size of nickels, intended to add some pizazz by reflecting light off the marquees around them.

In addition to the surface changes, the new design calls for the installation of numerous large benches of different heights and sizes. In addition to providing more seating for large groups, the new furniture is part of a larger effort to create distinct spaces within the plazas, to make them easier to navigate and to keep throngs of milling tourists away from hurried office workers rushing to and from work.

The larger goal is to create a situation and environment in Times Square that’s friendly for both New Yorkers and tourists alike.

Another benefit of the design, he said, is the inclusion of new infrastructure to cut down on the amount of equipment needed to stage large events.

It will also restore some of the aging infrastructure below Broadway, which has not been rebuilt in more than 50 years and still has trolley tracks running beneath the asphalt, a Department of Transportation representative said.

While other visions for the square had focused on adding new lights and new attractions, Dykers said he wanted to make the ground level as simple as possible to keep the focus squarely on the “frenetic” billboards above.

Another point of concern was a new bike lane that will run through the square, traveling back and forth between Broadway and Seventh Avenue. Under the current plan, the lane would enter Times Square from the north on Broadway, switch over to Seventh avenue at West 47th street, switch from the west side to the east side of the street at 45th street, and then cross back over to Broadway at 42nd Street.

Officials from the Department of Design and Construction say they expectconstruction to begin early in the fall of 2012 and will make every effort to keep traffic flowing as the work. The project is slated to be complete by 2014.

Monday, May 7, 2012

NYC Construction Spending Dropped Slightly in 2011

Residential Sector on the Mend as Government Spending Shrinks.Overall construction spending in New York City reached $27.4 billion in 2011, a 3.5 percent decline from 2010, when total spending reached $28.4 billion, according to a New York Building Congress analysis. Construction spending is down 12 percent, in current dollars, from the peak year of 2007. 

The Building Congress projects overall construction spending will reach $28.8 billion in 2012, before falling to $25.1 billion in 2013. This updated forecast shows a modest improvement from the initial October report, which primarily reflects significant anticipated increases in residential construction activity.

Government construction spending, which includes investments in mass transit, public schools, roads, bridges and other essential infrastructure, reached $14.4 billion in 2011 – down 10 percent from 2010 ($16.1 billion). Despite the decline, government construction still accounted for 53 percent of all construction spending in the five boroughs last year.

The near-term outlook, however, shows cause for considerable concern. The Building Congress forecasts government construction spending to decline to $12.7 billion in 2012 and $9.6 billion in 2013. If the projection holds, the 2013 numbers would represent a 40 percent decline in public sector spending from 2010.

The residential sector is anticipated to experience a remarkable reversal of fortunes. After bottoming out at $2.3 billion in 2010 (down from a peak of $6.4 billion in 2007), residential construction spending increased to $2.9 billion in 2011.
Better yet, the Building Congress is projecting a dramatic resurgence in residential construction in the coming years – with spending reaching $4.8 billion in 2012 before climbing to a non-inflation-adjusted record of $6.8 billion in 2013. The improved forecast is based on a preliminary review of recent residential permitting data.

Non-residential construction, which includes office space, institutional development, sports/entertainment venues and hotels, held steady – from $10.0 billion in 2010 to 10.1 billion in 2011. This sector was bolstered by ongoing work at the World Trade Center, Barclays Arena and Madison Square Garden.

The Building Congress forecasts non-residential construction to increase to $11.2 billion in 2012 before falling to $8.6 billion in 2013. At present, there are a fair number of large scale mixed-use projects that have been proposed and approved. Should the economy continue to improve, the developers for a portion of these projects may be able to obtain the financing necessary to get them started.

Construction employment averaged 111,500 jobs in 2011, down less than one percent from 112,400 jobs in 2010. Employment in this sector, however, remains down 16 percent from a peak of 131,400 jobs in 2008 and is at its lowest level since 2004. The Building Congress projects construction employment to increase to 120,800 in 2012, before dropping to 105,400 jobs in 2013.

Sunday, May 6, 2012

Forest City Ratner’s Modular Factory in Brooklyn Navy Yard

Forest City Ratner believes modular construction will grow increasingly common in New York City high-rise development and that is one reason the firm has established a modular factory in the Brooklyn Navy Yard. Utilizing modular construction for the 34-story, 340,000-square-foot residential building set to rise in Atlantic Yards could cut the construction time of the project by one-third to just 12 months.

Even as costs are reduced, the construction method will not impact future tenants in the rental building. Those realities will compel more developers to deploy the technique.

“The fact is that modular construction is coming,” Maryanne Gilmartin, an executive vice president at Forest City Ratner, said. As a result, Forest City Ratner expects the modular factory it is developing at the Brooklyn Navy Yard to be rented out by competing development firms.

For now, approximately 60 percent of the work on the forthcoming tower, which would be the tallest tower in the world constructed with the modular method, will be completed at its factory in the Brooklyn Navy Yard.

Saturday, May 5, 2012

New Willets Point Deal Will Cause More Delays

The city is close to a deal with The Related Cos. and a real estate firm controlled by the Mets' owners, to remake a 12-acre portion of Willets Point, Queens. The move that simultaneously advances and delays one of the administration's most complicated development initiatives - virtually ensures the project will not get off the ground before Mayor Bloomberg leaves office.

The proposal by Related and Sterling Equities for a retail and residential development in the shadow of CitiField involves zoning changes that require a new environmental impact study and City Council approval.

The study will take about a year to complete, making it likely that one of Mayor Michael Bloomberg's signature projects will not get off the ground before he leaves office in 20 months.

The city recently withdrew its bid to condemn land in Willets Point to clear way for development. Eminent domain is still possible, but the city will restart the process after the new plan is officially announced.

The city's goal is to get the environmental study and zoning amendment done before the mayor leaves office, which could prove challenging. The Bloomberg administration nevertheless insisted its plan to remake the so-called Iron Triangle into a retail, residential and entertainment district remains on course.

“We're very close to having a deal in place that will transform Willets Point into New York City's next great neighborhood and continue the historic progress we've already made there,” said a representative for Mr. Bloomberg.

It will also likely lead to a battle in the City Council, which would have to approve the zoning amendment even though a second land-use review will not be needed. Related has been in discussions about leasing space at a Brooklyn development to Wal-Mart Stores Inc. for several years, angering council members who oppose the retail giant's potential entry into the city and feel they were misled about whether a Wal-Mart store would be built there.
Regaining control over the Willets Point approval could give the council advantage to pressure Related to drop its dalliance with Wal-Mart. The council has rejected two Related projects—a mall at the Kingsbridge Armory and a BJ's Wholesale Club, mostly over concerns about workers' wages.

The challenges of Willets Point—a rundown, 61-acre swath of land in northeast Queens—have for decades bedeviled officials, including Robert Moses and Mayors Robert Wagner, Ed Koch and Rudy Giuliani.

In 2007, Mayor Bloomberg appeared to be on his way to a solution, calling the future of the area “very bright indeed.” However, the city's ambitious plan was based largely on the mid-decade boom, and the path to that future quickly developed Willets Point-size potholes.

The City Council approved the mayor's vision for Willets Point in 2008, just as the economy tanked. Residential projects in nearby Flushing—by all accounts a more vibrant neighborhood—struggled. Deals that required developers to pay prevailing wages to building service workers, use union construction workers and make 35% of housing “affordable” were difficult for developers to swallow in a down market.

Moreover, a gritty group of area business owners used legal maneuvers to throw the project off course. City officials found themselves without full control of the site, challenged in their quest for highway-ramp approvals and staring down a brutal financing environment. They divided the project into three stages to help it get started faster.

Even as selection of a developer for the first phase nears, questions remain. The redevelopment is complex, requiring environmental remediation, infrastructure upgrades and land acquisition.

The city controls 90% of the phase-one areas but has not ruled out using eminent domain to secure the remaining parcels, which would trigger opposition.

It has set aside $400 million for the project, of which about $100 million has already been spent on land acquisition.

Perhaps more significantly, the division of the project into stages raised doubts that it would work financially for developers. The first phase calls for up to 680,000 square feet of retail space, as many as 400 units of mixed-income housing, up to 387 hotel rooms and about two acres of open space.

None of the bids the city received conformed to what it asked for in its request for proposals. The Related/Sterling bid included residential, but sought to build more retail than was called for.

Two other joint proposals, by World Trade Center Developer Silverstein Properties and retail developer Taubman Centers Inc. and shopping center developer Macerich and residential developer AvalonBay, also strayed from the parameters outlined by the city.

Friday, May 4, 2012

Another High Line Residential Project from the Related Cos

The Related Companies has yet another residential plan in the works along the northern stretch of the High Line, their latest at 539 West 29th Street. It is just down the block from their 33-story, Robert A.M. Stern designed tower, which is getting ready to rise at 500 West 30th Street.

The plan at 539 West 29th Street is for a 15 floor residential apartment building with 126 units. Related's architect of record for this new project, is Ismael Leyva.

Rising across the street from 539 West 29th will be the block-busting Avalon West Chelsea, where the big dig out for 700+ new residential units is on going. Towering above Related's newest project, where an old garage stood until it was demolished last summer, is the big white slab better known as Ohm.

This new project is part of the development land rush in the vicinity of NYC's newest neighborhood at Hudson Yards, Related's mega-project covering 26 acres, with more than 5.5 million square feet of commercial and residential buildings, all encircled by the last stretch of the High Line.

 Proximity to the High Line is proving to be the economic boon foreseen by the Bloomberg administration when this area was re-zoned back in 2005.

Thursday, May 3, 2012

$1.2 Billion NYU Facility to Create 10,400 Construction Jobs

NYU Hospitals Center has filed for state regulatory approval of a $1.2 billion project to build a new clinical facility, the Helen L. and Martin S. Kimmel Pavilion. The filing calls for a new 22-story, 830,200-square-foot building  to be located on the medical center's existing campus at East 34th Street between First Avenue and the East River, where the Rusk Institute of Rehabilitation and the Ronald O. Perelman Research buildings now stand.

The new hospital is designed to meet the changing demands of health care. With more patients treated outside hospitals, the new facility will be geared to the sickest ones, with more intensive care and intermediate care beds than the current configuration.

Between now and 2021, NYUHC projects it will have an 11% increase in patient discharges, to 27,000 patients annually. Its average occupancy rate will go to 81% from 71%. The average length of stay will fall to 5 days from 5.6.

If approved, the new pavilion will have 374 inpatient rooms with one bed each. That design could help the hospital's bottom line by helping it control costly infections and making patients feel better about their hospitalization—at a time when reimbursement will be based in part on patient satisfaction scores.

The total number of licensed beds is unchanged, as the medical center is asking the state Department of Health to decertify other beds currently used for medical/surgical, special, pediatric and rehabilitation patients.

The pavilion will have 32 advanced operating rooms and 39 non-inpatient beds for people who require observation but not hospitalization after a procedure. It also will house a children's hospital, the Hassenfeld Pediatric Center.

NYU said the project could generate some 10,400 construction jobs in New York City, $1.44 billion in economic output and 9,100 nonconstruction jobs.

Wednesday, May 2, 2012

Zell Gets Concessions at 170 Amsterdam, Morningside Dr

Equity Residential is taking over a major stalled construction site at 170 Amsterdam Avenue on the Upper West Side, and also hopes to start construction on a 15-story apartment building just north of the Cathedral of St. John the Divine, in Morningside Heights, early next year.

170 Amsterdam Avenue 

The Chicago-based company headed by Sam Zell signed a 99-year lease for the site with American Continental Properties for $76.5 million.

While transfer taxes were paid on the entire amount it is unclear if a yearly rental is also involved or if that is the total payment.

The 20,700-square-foot site is on the westerly side of Amsterdam Avenue between W. 66th and 67th streets. According to documents, the lot has at least 238,893 square feet of development rights.

“We did just sign an agreement with the intention of building a tower,” said Equity spokesman Marty McKenna, who declined to discuss the finances. He did tell us the new building will have about 8,500 square feet of ground floor retail and 230 apartments.

Cathedral of St. John the Divine Campus 
For decades, New York City has considered designating the Cathedral of St. John the Divine as a landmark. But city landmark officials wanted to wait until the cathedral—under construction since 1892—was "finished."

But talk about landmark status for the perpetually unfinished Episcopal church is starting to percolate again, as developers ready plans for a new apartment building on leased cathedral property along 113th Street in Morningside Heights.

Real-estate firm Equity Residential hopes to start construction on the 15-story apartment building next year. The new structure's footprint would be some 70 feet north of the cathedral itself, replacing large metal sheds and parking spaces in the area now.

Church officials maintain that completing its "real-estate initiative"—as they call an apartment building already open at the southeast corner of the cathedral property as well as plans for another one on the north side—are an economic necessity to provide revenue for the cash-strapped cathedral.

The real-estate income "has a huge impact on our capacity both to operate the cathedral, maintain our mission and, really importantly, do the work we need to do on the cathedral building itself," said Stephen Facey, the cathedral's executive vice president. Now that the real-estate initiative is almost complete, he said the cathedral could renew discussion about landmark status for the cathedral and the rest of its grounds.
  Some preservationists and area residents argue that such overtures already will be too late.

Efforts to landmark the cathedral are as storied as the imposing building itself. The Landmarks Preservation Commission first formally considered designating it shortly after city landmark legislation was enacted in 1966, and it placed the entire 11.3-acre cathedral campus—also known as "the close"—under consideration in 1979. But on both occasions, the commission decided to hold off on the landmark designation until the cathedral was "finished."

In 2003, the commission decided it was time. It also decided to remove the campus's two future building sites from landmark consideration to help the cathedral raise enough money to pay for repairs.

Though the cathedral endorsed the commission's decision, some neighbors, led by then-City Council member Bill Perkins, objected. They argued that designating the cathedral a landmark while keeping sites on its campus open to development was inadequate.

Mr. Perkins persuaded his colleagues to unanimously reject the commission's proposal for St. John the Divine, a power little used by the council. Mayor Michael Bloomberg vetoed the council's rejection, but the council overrode this as well, a vote even rarer than overturning the commission's initial plan.

The moves and counter moves left the cathedral still without landmark protection, and the commission hasn't taken any major steps toward landmarking the cathedral or its campus since 2003. But the commission now is actively reviewing the timeline for designating the important historic resources at the site.

Since 2003, the cathedral has moved ahead with its development plans but only on the two sites that the commission had voted to remove from landmark consideration.

It awarded a 99-year lease to AvalonBay Communities Inc. for construction of a 20-story apartment building at the corner of Morningside Drive and Cathedral Parkway, which was completed in 2008. The building provides $2.7 million in annual income for the cathedral.

The northern side of the Cathedral of St. John the Divine's campus along 113th Street where a residential building is planned.

At the leased site on the north side of the campus between Amsterdam Avenue and Morningside Drive, Equity Residential selected Handel Architects to design the planned apartment building and hopes to start construction in early 2013, depending on when building permits and construction documents are received.

Cathedral officials have set certain restrictions for the new building, including holding the new development's height to about 145 feet—the same as the eave line of the cathedral—and protecting certain street views of the cathedral.

The new building will respect the architectural legacy of the cathedral, but anything designed and built will be 'modern' and not neo-Gothic.

Mr. Perkins said he is willing to work with cathedral officials on alternative ways for them to meet their financial needs, but he hasn't changed his stance since 2003 on wanting the entire campus landmarked.

Tuesday, May 1, 2012

Union Labor to Build Park Ave South Tower

One of unionized labor’s harshest critics, Equity Residential Chairman Sam Zell has chosen union labor to construct the $190 million Park Avenue South tower he’s developing with Toll Brothers. Zell’s construction manager, recently penalized Lend Lease Construction, struck an agreement with the Building and Construction Trades Council that will reduce standard union labor costs by 20 percent.
Zell famously caught heat for using non-union workers to construct his 111-unit apartment building at 500 West 23rd Street. But it's speculated that his recent decision at Park Avenue South and East 28th Street isn’t a change of mindset for the developer, but rather a decision made because of the discount, the size of the project and the need to curry favor with local officials for future projects.

Zell is close to reaching a similar agreement for the 230-unit project at 170 Amsterdam Avenue between West 66th and West 67th streets through construction manager Plaza Construction.

He is also hoping for one at his Church of St. John the Divine site in Morningside Heights, as well.

While the new union contracts may have been facilitated by last summer’s extensive contract negotiations, There’s still much work to do before all big developers return to using unionized construction labor.