Massive Rezoning for LIC?
We're sure it's been on your mind, what with LIC undergoing massive changes in a short period of time. At our Long Island City event yesterday, we have confirmation it's on the tongues of elected officials, as well.
NYC Council Majority Leader Jimmy Van Bramer, who reps Western Queens, met on Monday with Mayor Bill de Blasio, the Department of City Planning, and fellow council members to talk about a major rezoning in LIC. Queens Plaza, Court Square, and Hunter’s Point all are on his radar, but that’s all he could share with the 275 attendees at our event at the community’s premier Water’s Edge venue.
More immediately, the panelists expressed concern about the impending expiration of the City’s 421(a) tax exemption for multifamily construction.
Uncertainty about that will stall development, says Ekstein Development CEO Erik Ekstein (whom we snapped with Meadow Partners’ Tim Yantz and Tannenbaum Helpern Syracuse & Hirschtritt’s Eric Schoenfeld). Though 11,000 apartments are in the pipeline, it's cloudy for any project not coming out of the ground by June (those would be getting underway now).
After that pipeline, for which the panelists say there’s plenty of demand, that may be it for rentals in LIC. Land prices have risen so that only condos pencil out, says Related Hunter’s Point South head Frank Monterisi (who was married right at the spot where his chair sat at yesterday’s event). His company, Phipps Houses, and Monadnock Construction are building 925 affordable units (most of them for the middle class) on the waterfront.
A wave of condos is already is heading for LIC, according to Modern Spaces CEO Eric Benaim (flanked by colleague Evan Daniel and Charney Construction & Development’s Sam Charney). He’ll bring seven condo projects to market in Q2 ’15.
Miller Samuel CEO Jonathan Miller (whom we snapped with our moderator Andrew Luftig of Chaves & Perlowitz and Douglas Elliman LIC office head Rick Rosa) says residents aren’t going to LIC just for the value proposition. It’s become a standalone destination market, much like Brooklyn did.
In fact, the area is developing separate submarkets—Hunter’s Point, Court Square, Queens Plaza—each with their own strong personalities, says World-Wide Group development director Rachel Loeb. World-Wide was one company who bet on the transportation nodes inland. It's topped out Queens Plaza’s 41-50 24th St and will start marketing the 421 units early next year.
When it was time for JetBlue to move out of its Forest Hills HQ, it looked as far as Orlando for a new home, says corporate real estate head Rich Smyth. The company instead became an early adopter of LIC and now has 1,000 employees in its HQ in LIC’s Queens Plaza. An increasing number of them are relocating their own homes to LIC, too, he says. The same goes for employees of a lot of smaller companies, says CBRE’s Josh Kleinberg. Rick says there’s surging demand for family-size units.
MNS CEO Andrew Barrocas remembers the pricing spread between Manhattan and LIC when MNS entered LIC by acquiring a few multifamily development sites for $100/SF. Rentals would lease for $50/SF while Hal Fetner told Andrew he was getting just $40/SF for an UES high-rise. Andrew finally got Hal “over the hump” (translation: over the East River), where he's building at 44-02 Vernon Blvd.
Next on Long Island City’s agenda are community amenities. Restaurants have improved big time since 2011 when Simon Baron Development started investing in the area and there was nowhere to eat other than Scandals’ lunch buffet, says president Matthew Baron (right, with our moderator Alan Perlowitz of Chaves & Perlowitz and Josh). Eric says the area has more than 100 restaurants but only half a dozen boutiques. Considering all the strollers he sees, the area could use another school, too. (Also a golden opportunity for Stroller Repairman Union Local 123.)
LIC Partnership president Liz Lusskin points out the enormous opportunity to advance the local retail market, especially in the ground floors of all these new residential developments. The retailers that best suit the bootstrap submarket are comparable-to-national-chain local operators like Sweetleaf instead of Starbucks and Food Cellar instead of Whole Foods.
