MAG Partners to redevelop Chelsea corner
MaryAnne Gilmartin’s development firm struck a deal to redevelop a corner site on Eighth Avenue in Chelsea.
MAG Partners signed a long-term lease with a sprawling, multi-block affordable housing complex for a dilapidated retail building at 335 Eighth Avenue, The Real Deal has learned. The firm plans to redevelop the site into a mixed-income apartment building with a grocery store and community space. Construction is expected to start in 2022.
The seven-story project will qualify for the Affordable New York program, with 30 percent of the approximately 200 set aside as affordable.
The Penn South complex in Chelsea was facing a conundrum as its 60-year-old retail building on the northwest corner of West 26th Street and Eighth Avenue needed significant repairs that the low equity co-op could not afford.
At the same time, leases with current tenants — Gristedes, McDonald’s, a tennis center and other services — were set to expire, meaning the co-op was facing a substantial drop in income. As a result, its 2,820 apartments would be due for a $500 monthly increase in maintenance fees.
The board had hired Paul Travis of Washington Square Partners as its real estate advisor in 2008 and he provided several options. Earlier this year, the co-op’s 5,000 residents voted to create a 99-year lease on the property so the rent payments would replace the lost income.
“The top priority for the Board of Directors is to preserve the affordability of Penn South for current residents and future generations,” Ambur Nicosia, the board’s president, said in a statement. “We needed a solution that does not require our shareholders to pay major increases in monthly maintenance fees. The stores are supposed to subsidize the apartments, not the other way around.”
After interviewing and getting bids from seven developers who specialize in such projects, the board agreed to lease the site to the woman-owned MAG Partners.
“They want to build affordable housing and do the right thing,” Gilmartin, CEO of the firm, said of the co-op board. “They were concerned about the views [of current residents] and space around the new building.”
Her company is currently constructing a similar but larger project at 241 West 28th Street, on land owned by Edison Parking. “The [board was] watching from afar and saw how we designed the building,” Gilmartin said.
The architect of the West 28th Street building, Rick Cook of COOKFOX Architects, will also design the Penn South project with an eye on the red brick of the 10-co-op buildings and the historical character of Chelsea.
“Obviously, it’s an incredible perch,” said Gilmartin of the site and the possibility of a roof deck for the occupants. “It’s something we will study and also the placement of the building, and then go back to show it.”
During her tenure at Forest City Ratner, Gilmartin oversaw the development of the New York Times Building on West 41st Street, the Barclays Center in Brooklyn and the Frank Gehry-designed 8 Spruce Street residential tower in downtown Manhattan. She also recently helmed the real estate investment trust Mack-Cali through a transition period.
Gilmartin announced the launch of her firm in December 2019. In addition to the 28th Street project, MAG is the development partner on a 6-acre development in Long Island City.