July 2, 2020
New York Magazine

For Blue-Sky Urban Ideas, It May Be Now or Never

Last month, I passed through Tribeca, which was deathly quiet, its storefronts armored in plywood. Suddenly, a mirage appeared: a woman, coiffed and made up, wearing a skirt and high heels, strode down a deserted block, swinging a white handbag. She seemed like an alien who had dropped in on our world of stay-at-home schlumps, or maybe just a visitor from another year, a normal person highlighting just how abnormal our city had become. A few weeks later, New York is starting to feel like New York again, though fitfully, and still with a streak of the surreal. The racket has returned, with construction crews and traffic once more drowning out birds. A few streets are alive with sidewalk drinkers, although much of midtown still lies under its cone of silence. The woman with the handbag might blend in again.

It’s too soon for celebration, and the picture is too mixed for optimism. But at least, after months of eternal present, the future is coming into view: we can at last begin to look ahead, and not just with dread. New York is beginning to rethink many of its ossified assumptions. You can see it in the push to strip hundreds of millions of dollars from the NYPD, in the mayor’s executive order commandeering privately owned public spaces for the common good, in the short-order network of bike lanes and open streets, in the multiplication of dedicated busways, in the conversion of hotels to housing for the homeless. Governor Cuomo and Mayor De Blasio have wisely held off letting restaurants operate indoors, where diners are at the mercy of unreliable air-conditioning systems. If, come cooler weather, distrust of the great indoors persists and restaurants can’t lure customers back into their dining rooms, New York should invest heavily in heat lamps, emulating Northern Europe’s virtually year-round outdoor dining culture—not just in the brunchiest zip codes, but along, say, Dyckman Street or wherever New Yorkers eat.

Some of these measures are temporary or insufficient, but they suggest a willingness to draft in the wake of bolder cities. Paris has just reelected mayor Anne Hidalgo, who has made pedestrianizing and de-polluting her city so central to her campaign that she recently floated a proposal to turn its beltway, the much-loathed Périph, into a more leisurely, verdant, and crossable boulevard. New York should aspire to similarly transformative moves.

We tend to treat cities like the weather, using past patterns to predict outcomes over which we have no control. But the last few months have reminded us that cities are not givens, the status quo isn’t immovable, and citizens can force their elected officials to crash through bureaucracy and inertia. As New Yorkers emerge from a bitter spring and weeks of angry but hopeful protest, we can—must—recognize that after the fears of infection comes a point of inflection in the city’s history when its future is up for grabs. What will happen is what we make happen.

During the most heated days of the protests, I watched crowds march for a more equitable city, and worried that New York seemed suddenly, intensely fragile. A deadly shot, an out-of-control fire, a spate of destruction—any of these could have marked New York for a generation, and I wasn’t sure how great a body blow it could absorb before it began to conform to Trumpian fever dreams. My optimism about the city’s resilience ebbed by the minute. The crisis administered local and national governments all over the world a brutal series of tests, and the record is not good. They failed to contain the epidemic. While some East Asian cities managed to blunt its worst effects, New York couldn’t. Could the nation take necessary public health actions without bringing financial catastrophe on millions of households? Nope. Could we finally bring the contagion under control, or start opening up without triggering a new assault? Depends where you look. The cost of incompetence has been horrific.

Now New York’s leaders are confronting another round of challenges. The most immediate question is: Can we keep the city from entering a death spiral, where residents pull up stakes, revenues fall, the city becomes less appealing, causing more people to leave, and so on? The key to preserving New York’s magnetism is to restore its feeling of safety—from crime, from the cops, and from coronavirus.

Even before the pandemic, moving around New York was always a leap of faith. You had to trust that almost everyone in the swarms around you would behave with respect and a sense of cooperative sense of sharing. Urban living is a form of minute-by-minute collaboration. Conflict, cruelty, and violence are everyday occurrences, but they are also relatively rare. Every rush hour, millions of people brush past one other without incident, packing subway platforms without acting on an urge to shove, sharing elevators without fear of being stabbed, ordering at Shake Shack without worrying that the milkshake is poisoned.

Getting back to daily life means rebuilding that delicate web of trust. If I’m going to ride the subway, I have to assume that the man sitting next to me takes the same sorts of reasonable precautions I do. Before we can function normally, we must each be convinced that new habits and protocols are sensible, and that restaurants, employers, schools, and public agencies all scrupulously follow them. And then we have to make a greater leap, and learn to trust governments that have let us down.

Change is risky, but business as usual is Russian roulette: keep at it long enough, and death is sure to follow. An $8 billion crevasse has opened in the budget of the MTA, leading the agency to halt all work on its five-year capital plan. Not enough people are riding the subway, so we have no money; do we really want to let the system go to hell so that nobody wants to ride the subway ever again? Those who can drive will, causing gridlock that makes East Midtown during the United Nations General Assembly seem like a desert highway. The more commuters rely on their cars, the more they will fight any attempt to claw some pavement back for restaurant tables, bike paths, pedestrian plazas, and bus lanes. SUVs will spread like bishop’s weed, smog will refill the air, and professionals will jump at the chance to stay in the suburbs and work remotely.

In the past 20 years, as the number of tourists and New Yorkers has continued to grow along with the economy, there were those who felt that the city city was being swamped. Yet we can’t let this become a place where only the hardy and hopeless choose to stay. I’m less worried about spooked residents’ fleeing—that’s a fine New York tradition—than about potential newcomers’ being unable to arrive. For now, the gates remain closed: immigration has all but stopped, flights from abroad are scarce, and Cuomo has made it clear that visitors and returnees from Florida, Texas, and other virus-stricken states are welcome only if they commit to quarantine. The prolonged freeze will deepen the city’s wounds. “I’ve seen other external shocks to our industry,” says Vijay Dandapani, head of the Hotel Association of New York City. “After 9/11 and the Great Recession, it took a year and a half for revenue growth to happen. But in both those cases, occupancy never dropped below 60 percent. Now, there’s no pulse.” (During the pandemic, it has dipped as low as 16 percent.) Dandapani says he figures it will be five years before the tourism industry begins to resemble 2019 again.

Impromptu decisions can have long-term implications if we pay attention: Treat those who cry for justice as an enemy horde and you will divide your city further; treat them as teachers and you can heal. In Aurora, Colorado, a protest to commemorate the death of Elijah McClain summoned violinists for “an improvised harmonization,” which wound up so alarming the police that they tried to break up the concert with riot gear. Even so, the electric fiddler Jeff Hughes jumped on a truck and kept the music going. String-instrument actions are going national: another took place a few days later in Washington Square, and it was not  treated as a security threat.

After months of communing with our devices, we badly need live music. Traditional venues will stay dark for the rest of the year, but in the meantime, the city might breathe life into New York’s musical life by seeding it outdoors. The Department of Cultural Affairs should team up with cultural heavy hitters like Lincoln Center, plus Make Music New York, an organization that mounts a twice-annual solstice celebration with more than a thousand concerts, large and small, all across the city. One of my indelible musical memories is from a decade ago, when I drifted in a rowboat out onto the lake in Central Park and listening to Iannis Xenakis’s Persephassa as it was performed by percussionists ranged along the shore. The year before, Bang on a Can launched an avant-garde marching band, Asphalt Orchestra, that could be revived as a rapid-deployment morale booster, popping up around New York for half an hour of joyful mayhem. Pop-up concerts, chamber music flash mobs, socially distanced dance parties, and parking lot recitals can be quick, small, cheap, and safe. They would go a long way to bringing some joy back to New York’s streets and keep the death spiral at bay.

As we navigate these next fluid months, we should be thinking about another question that will test New York’s character: Can we learn the right lessons from our overlapping crises—disease, discrimination, and threats to democracy—and put them into action, even after the immediate sense of emergency has passed? Passing that test means baking principles of equity into the zoning code and development plans, intensifying the fight to control pollution and climate change, rethinking the way New Yorkers move around the city, and reopening the spigots that bring in immigrants, visitors, and workers from other states to refresh the city’s economy.

Even as the city pares its budget and prunes its payroll, we can’t just hunker down and hope for the best. We need to intensify our ambitions for the developments and public projects that will define the next iteration of New York. We still need Gateway or its equivalent (the new passenger-rail tunnel beneath the Hudson), a transformed Penn Station, a new Port Authority, and a less noxious version of the BQE. (Yes, tax revenue has tanked and federal funding may have to wait for a changing of the guard in Washington, but there’s plenty of planning to do in the meantime.) Sunnyside Yard still holds promise as an anti-Hudson Yards. The areas of Long Island City that Amazon walked away from in 2018 can still benefit from large-scale development. “I’m bullish on Queens,” says MaryAnne Gilmartin, one of the developers involved in a mixed-use project next to the ex–-Amazon site. “The problem is to get people to stop reacting and think ahead. Even though the [city’s] Economic Development Corporation is hard-wired to think about the future, right now they’re mired in the present.”

A crisis is a challenge to our notion of impossibility. It inflicts on us circumstances we thought fantastical, and reminds us that distant threats quickly become real. Climate change will be like that. But it also teaches us not to despair. What we thought was impossible is doable. During the pandemic, we moved our social, work, and cultural lives online. We survived without planning ahead. And through it all, we preserved our indignation, our moral instincts and our sense of shame. We emerged ready to ask not just What’s gonna happen next? but: How do we get to the city we want to live in?

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June 16, 2020
Crain's New York Business

New offices outside Manhattan depend on millennial lifestyle after Covid-19

Later this year a new 500,000-square-foot office building will open in Downtown Brooklyn with the latest technology, including fingerprint scanning, options for individual air-conditioning units for tenants, high ceilings, no columns and no elevator buttons. One Willoughby Square, said developer Morris Jerome, is the perfect building for the post-pandemic world in the perfect place.

Meanwhile in Queens, a consortium of four developers working on a proposal for a Long Island City waterfront property once planned for Amazon’s second headquarters has revamped its plan to increase the amount of office space to 5 million or 6 million square feet in the belief that the new normal will compel companies to locate closer to where their employees live.

“Companies need talent and need to be where the talent is,” said MaryAnne Gilmartin, who spent years working on the development of Brooklyn and is now part of the Queens consortium. “That talent is predominately in the boroughs and especially Brooklyn and Queens.

Developers, brokers and business leaders say the pandemic has made the case for relocating employees to Brooklyn and Queens stronger than ever. The long-term trend of some companies—especially so-called innovation economy companies—moving to those two boroughs to tap the talented young professionals who live there has now become the best way for the city to develop additional business districts that can shorten commutes and allow many employees to walk or bike. Of course, the space is much cheaper than in Manhattan, and the renewal of the Relocation and Assistance Program incentive in the budget passed in the spring cuts rents by an additional $10 to $15 a square foot.

They don’t have any leases yet to prove their point. More important, their plans depend on two crucial assumptions. One is that working from home will not reduce the demand for office space so much that no new space is needed. The other is that the millennials and young families who have transformed Brooklyn and Queens remain committed to the city, and the pandemic and economic shutdown haven’t made the group more interested in moving to the suburbs or beyond.

Brooklyn, in particular, had already established itself as a home to technology and media companies, with both online craft seller Etsy and Vice Media headquartered there. The Brooklyn Navy Yard and Industry City have made themselves destinations for a combination of innovative manufacturing companies, design firms, film studios and sports teams, including the NBA’s Brooklyn Nets.

“Companies were discovering the waterfront, with affordable places, more green space and shorter commutes, before the pandemic,” said Andrew Kimball, chief executive of Industry City. “That is our leasing model.” Industry City says it is close to signing a lease with a firm that had planned to move to the Hudson Square neighborhood before employees balked at returning to Manhattan.

Cost remains a key to luring companies. Asking rents in Industry City are bracketed around $30 a square foot, with Downtown Brooklyn and Long Island City at about $50. The renewal of the REAP tax credit in the state budget provides an annual tax break of up to $3,000 per employee for 12 years, reducing the effective rate by anywhere from $10 to $15 a square foot. The average asking rent in virtually all of Manhattan in the first quarter was $75 a square foot, with tax incentives limited mostly to downtown and Hudson Yards.Crowded commutes

The pandemic has made this proposition more compelling, both because people are wary of crowded commutes into Manhattan and because the city’s stated commitment in both the Bloomberg and de Blasio administrations to a five-borough economy has become even more of a necessity.

For example, the key selling point of Downtown Brooklyn is that so many people can walk to their job, said Downtown Brooklyn Partnership President Regina Myer. When businesses start to look for space in Long Island City, added LIC Partnership President Elizabeth Lusskin, they discover many of their employees already live there. The outer boroughs can be the city’s best defense against a flight to the suburbs, Lusskin added.

Landlords and developers have instituted a variety of strategies to pursue office tenants for Brooklyn and Queens.

Industry City says it is open to leases of any length as companies want to make only short-term decisions while the long-term consequences of the pandemic are sorted out. “Tenants are asking, ‘Can we move somewhere for a year or two?’ ” said leasing director Kathe Chase, who allows companies to take more space or less as needed.

However, if the work-from-home experience of the pandemic proves to be long-lasting and companies like Facebook remain convinced that eventually half the workforce will be doing that, there simply may be no need for additional office space.

If the millennials and young families who have flocked to Brooklyn and Queens decide the city is no longer for them, the argument for being located where the talent is evaporates. 

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May 21, 2020
LIC Post

Developers Unveil Big Plans for LIC Waterfront, Up to 12 Million Square Feet Planned

A group of developers looking to build on a 28-acre section of land surrounding Anable Basin provided an overview of their plans at a Community Board 2 Land Use Meeting Wednesday night.

The developers announced that they are looking to build 10-to-12 million square feet of space on the 28-acre area with buildings that range in height from 400 to 700 square feet, the equivalent of 30 to 60 story structures.

The plan would focus heavily on commercial space, and the project would be developed over a 10 to 15 year period. The developers aim to get the property rezoned next year.

The plan includes 7 acres of open space, space for three schools and ½ million square feet for arts and cultural space and similar uses. The plan would also include a pedestrian/bicyclist bridge over Anable Basin that would connect 5th Street on both sides of the water.

The developers said that about 50 percent of the 10-12 million square feet would be for commercial use. The proposal would also include mixed-income housing, although the number of units was not disclosed at the meeting.

The plan–presented by a development team consisting of TF Cornerstone, Plaxall, Simon Baron Development and MAG Partners—incorporates the sites where Amazon HQ2 was slated to be built as well as some adjacent parcels.

The developers—with the exception of TF Cornerstone—each own a portion of the 28 acre area. TF Cornerstone is looking to develop two city-owned lots on 44th Drive, which are part of the 28-acre area.

The group came together last year at the request of the city council, which called for the developers to come up with one unified rezoning plan for the area as opposed to each having a separate concept for their own property.

The developers formed YourLIC and have hosted four workshops since November to solicit feedback from residents covering topics such as economic empowerment to open space. A fifth workshop was postponed due to COVID-19.

“We want to create a true mixed-use district with all the community resources needed to make it a place to live, work, play and thrive,” said Paula Kirby, managing director of Plaxall, whose family has operated a plastics factory and owned property in Long Island City for 70 years.

The developers said the project provides Queens with the opportunity to develop an economic engine at a time when New York City—and the borough especially—has taken a financial hit. They said it would generate a significant number of high-paying jobs.

The development team said that the scale and height of their buildings would also be in context with other Long Island City districts–such as Court Square and Hunters Point South.

“We believe this is appropriate for this location,” said Eleanora Bershadskaya, a Senior Associate at TF Cornerstone.

TF Cornerstone, she said, is developing parcel C at Hunters Point South, with one of its two towers reaching 550 feet.

Furthermore, the properties in the Court Square section of Long Island City are of a similar size. For instance, One Court Square—also known as the Citigroup Building–is 50 stories tall and about 670 feet tall. The Skyline Tower, which is going up at 23-15 44th Dr., will be 778 feet high and 68 stories.

The developers were asked about the scale and density of the plans given the pandemic. They said that they are planning for the long term and that there will be demand.

“We think density makes New York City great and we remain committed to that,” said Ashley Cotton, with MAG Partners. “We think immigrants, young people, professionals and college grads will continue to come here.”

The group went into detail about the open space, noting that it would provide a connection to Hunters Point South and sets the stage for a corridor that could eventually go to Queensbridge.

The plans call for a junior soccer field, a tot lot and a track at the northern section. Then farther south, provisions are made for a plaza, esplanade, kayak launch and more.

Kenny Greenberg, a member of the Land Use Committee, asked why the city-owned sites on 44th Drive were not being exclusively used for public use. He noted that community activists and elected officials—such as Congresswoman Carolyn Maloney—have called for the city-owned parcels to be used for a public purpose.

Bershadskaya, with TF Cornerstone, said that the developer has taken into consideration what has been said and changes have been made.

The initial plans for the parcels– that were put out as an RFP by the Economic Development Corp– called for 1,000 residential units along with commercial space and various amenities.

The sites, Bershadskaya said, will no longer be used for residential purposes. The sites will be for commercial use only and will include public space and a public school.“We are committed to public amenities,” she said. “This feedback hasn’t fallen on deaf ears.”

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December 15, 2019
The Real Deal

“Conviction and appetite to do it myself”: MaryAnne Gilmartin talks spinoff from L&L

When L&L MAG was formed nearly two years ago, there was a carveout option: MaryAnne Gilmartin could eventually strike out on her own. Now, she’s going that route.

“I have the conviction and appetite to do it myself,” she told The Real Deal on Sunday.

She will spin off from the company she started with L&L Holding’s David Levinson and Robert Lapidus and form what she described as a “truly woman-owned” firm, MAG Partners.
Crain’s first reported the split, under which the two companies could still work together.

When Gilmartin left Forest City to launch L&L MAG in 2018, she said she felt her “finest work is yet to come.” She wanted to focus on ground-up development — an area the real estate investment trust had been moving away from. Forest City was purchased that same year by Brookfield Asset Management for $6.8 billion.

The partnership with L&L served as a bridge for Gilmartin as she transitioned from a public company with an enormous balance sheet to a private one where she’d need to build relationships with investors to finance development. Not only did Gilmartin benefit from L&L’s existing connections, but the two forged new ones as part of L&L MAG. She pointed to Atalaya Capital Management, which didn’t have prior relationships with either L&L or Gilmartin. The firm invested in L&L MAG’s 460-unit residential project at 241 West 28th Street in Chelsea. Another firm that is investing in the project, Australian firm Qualitas, had met Gilmartin during her Forest City days.

But not all relationships will transfer to MAG Partners. For instance, Gilmartin said her new firm will not work with the $500 million joint venture which L&L and California pension fund CalSTRS launched prior to the creation of L&L MAG.

Since the firm’s launch, L&L MAG started the West 28th Street project and became a development partner at 44-02 Vernon Boulevard in Long Island City. The Queens site could be included in a potential rezoning, though it’s also embroiled in a long-standing foreclosure fight. The Durst Organization, which owns the debt on the property, has been trying to foreclose on the six-acre site for more than a decade. It’s unclear whether L&L will work on the Long Island City project.

Crain’s also previously reported that L&L MAG is competing against Silverstein Properties and Brookfield to develop 5 World Trade Center. Representatives for L&L didn’t immediately return messages seeking comment.

Gilmartin declined to discuss other projects that her new firm is considering. But she reiterated her desire to lead a development where a woman is responsible for every facet.

“There are women in every aspect of the real estate cycle that are rock stars and best in class,” she said. “One would not have to compromise in any way, shape or form to do that.”

She added that, of course, men can live and work at the project, joking, “It’s not that we’re going to keep the men out.”

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December 14, 2019
The Real Deal

Gilmartin splitting from Lapidus, Levinson

After less than two years, MaryAnne Gilmartin is splitting off from her development partners David Levinson and Robert Lapidus to go it alone.

Gilmartin, the former CEO of Forest City Ratner who teamed up with L&L Holding Co.’s Levinson and Lapidus to form L&L MAG in January 2018, has exercised an option to exit the partnership, Crain’s reported. Her new firm, to be called MAG Partners, will continue to focus on ground-up projects.

“Two years ago, we put together a vision for a new development firm and that partnership has been super successful,” Gilmartin told the publication. “But we had always planned to get to a point where I could spin off and achieve my goal of leading a new company. I’m in a position now to go forward and have the capital partners I need.”

L&L MAG had so far struck just one major development deal, for a 460-unit residential building in Chelsea. According to Crain’s, Gilmartin and the L&L executives will see that project through together. And Gilmartin’s new firm will take over full control of 44-02 Vernon Boulevard, a Long Island City development site that allows for a million-square-foot residential project. Gilmartin did not disclose whether she will have to pay a breakup fee to leave L&L MAG. [Crain’s]

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December 14, 2019
Crain's New York Business

Developer spins off from partners to launch her own real estate firm

The prominent real estate executive MaryAnne Gilmartin is splitting with developers she partnered with two years ago to launch a new real estate firm. 

Gilmartin said she had exercised an option to exit from the venture with David Levinson and Robert Lapidus, the chief executives of the real estate investment and development firm L&L Holding Company. 

Gilmartin’s new company will be called MAG Partners and will continue to focus on ground-up real estate projects in the city. 

“Two years ago, we put together a vision for a new development firm and that partnership has been super successful,” Gilmartin said. “But we had always planned to get to a point where I could spin off and achieve my goal of leading a new company.”

Gilmartin and Levinson both described the split as amicable and suggested they may still work together with one another on future investments. 

“It’s a reconstitution of our relationship,” Gilmartin said. “It’s fundamentally strong and positive.” 

Known as L&L MAG, the partnership between Gilmartin and L&L Holding Co. produced only one development deal during its lifespan, a project to raise a 22-story, 460-unit rental apartment building on West 28th Street. Gilmartin said that the venture would break ground on that tower early next year and would complete it together, but left open whether the two will continue to work together on other projects it had recently contemplated. 

Gilmartin, for instance, had been recently arranging to build a large residential property on a development site along the waterfront in Long Island City. She said MAG Partners would take over that deal at 44-02 Vernon Blvd., leaving it uncertain whether L&L Holding Co. would participate. 

“The answer is, we’ll take a good look at it,” Levinson said when asked whether he would continue to be involved in that development. “It’s an exciting project and we’d like to invest.”

Gilmartin had been a long-time executive at the prominent New York City real estate development firm Forest City Ratner, rising to the position of president and CEO before departing in early 2018 to launch L&L MAG. Much of Forest City’s portfolio was sold off subsequent to her exit. 

Part of the allure of joining with L&L Holding Co. was tapping Levinson’s and Lapidus’s network of connections to investment dollars, Gilmartin said. The pair have developed relationships with major institutional money backers, including the large California pension fund CalSTRS. 

“I have been a beneficiary of L&L’s relationships,” Gilmartin said. “I’m in a position now to go forward and have the capital partners I need. That has proved to be one of the great successes over the last two years together.”

Gilmartin declined to say who MAG Partners’ financial backers would be. Real estate developers such as L&L Holding Co. generally undertake real estate deals with a small amount of their own equity, securing the bulk of the cash needed to buy and build property from larger financial partners.

Gilmartin also declined to describe the financial terms of the split with L&L Holding Co. and whether she is required to pay any kind of breakup fee to the firm. 

Nearly a dozen employees from L&L MAG will join Gilmartin in her new venture. 

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November 16, 2019
Wall Street Journal

Amazon Loss Stings, but Long Island City Real Estate Shrugs It Off

The urgent inquiries for office space from companies aiming to do business with Amazon.com Inc. have long ceased. The near-constant flurry of calls from would-be investors in commercial buildings and condominiums has eased.

But the real-estate market in Long Island City has done just fine in the year since Amazon nearly made it a new home. The Queens neighborhood was suddenly the hottest in New York City after the giant retailer said in November 2018 it would open a headquarters there, bringing 25,000 employees to the area. Long Island City was just as suddenly deflated by Amazon’s abrupt cancellation of those plans.

Even without Amazon as a neighbor, commercial-property owners have attracted new tenants, thanks to the area’s relatively low prices and the abundance of new office space.

They leased more than three times the amount of space in the first nine months of the year than they did in that period during the previous year, according to Cushman & Wakefield PLC. Sales of commercial buildings rose 9%, according to B6 Real Estate Advisors.The Amazon EffectWeekly sales jumped in Long Island City after Amazon announced its move there in November 2018.Source: Smith Report and city finance recordsNote: Sales based on the date a contract was signed and is only for sales that closed. Excludes contracts signed in new buildings that haven’t yet opened.

Condo sellers have shrugged off Amazon’s snub. In the third quarter, median asking condo prices were up 7.5% compared with the same period in 2018. Median condo sales prices climbed 7.7%, while asking rents were up 5.5%, according to figures compiled by StreetEasy.com. Long Island City outperformed the rest of the city on most measures, with gains in median rent being slightly higher in Manhattan.

Amazon’s brief commitment to the neighborhood “put Long Island City on the world stage,” said Thomas A. Donovan, a partner at B6 Real Estate Advisors. “Long Island City was already on the trajectory toward being a good downtown.”

The real-estate firm Savanna may have had the most dramatic reversal of fortune with the pullout of Amazon. The retailer had planned to take a million square feet that was soon to become vacant at Savanna’s One Court Square. Savanna worked quickly and signed a 332,000-square-foot lease with the health-care company Centene Corp.

The property owner also managed to woo back Altice USA, the cable company that had been squeezed out by Amazon’s commitment. Altice signed a deal for about 103,000 square feet at One Court Square.

Overall, owners of Long Island City office properties signed 1.2 million square feet of leases in the first three quarters of the year, far exceeding the 331,538 square feet recorded for the same period in 2018, according to Cushman. The vacancy rate, though still significant, dropped to 14.7% in the third quarter from 18.4% a year earlier, also indicating strong demand.

But asking rents for office space dipped 7.5% to $40.65 a square foot in the third quarter, the third straight quarter of decreases, according to Cushman.

“Prices have come down because there is a lot of space on the market,” said Neil Dolgin, co-president at the real-estate firm Kalmon Dolgin Affiliates Inc. “There is more supply than demand.”

As with the office market, Amazon’s announcement sparked a surge of activity in the residential market. At the time, groups of investors went from sales office to sales office by bus, and some brokers said they clinched deals by cellphone.

In February, when Amazon backed out and the music stopped, sales continued although at a slower pace in the midst of a broader slowdown in condominium sales in the city. The number of investor-buyers looking for studio and one-bedroom apartments is down, brokers said, but purchases by people from Manhattan looking for larger apartments are up.

Amazon said it had planned to develop a new office campus along the East River, in an area known as Anable Basin. Now developer MaryAnne Gilmartin, chief executive of L&L MAG, and two other firms that control property in the area said they are talking to local residents and businesses about developing there.

L&L MAG is still “bullish on the location with or without Amazon,” Ms. Gilmartin said.

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November 15, 2019
The Real Deal

Unions at bay, but hostility for real estate worse than ever

Inside an elegant dining room at the Pierre hotel Thursday, panel moderator Robert Blumenthal scanned the floor — packed with real estate’s biggest names — for signs of unrest.

It was a decidedly calmer scene than at the same Schack Institute of Real Estate capital markets conference a year ago, when protesters interrupted the panel discussion to blast Stephen Ross, the Related Companies chairman, whose firm was in a dispute with unionized construction workers.

“I’m glad we’re all here again,” Blumenthal quipped. “We also have more security this year.”

Ross, who shared the stage with fellow industry titans Marty Burger, MaryAnne Gilmartin, Scott Rechler and William Rudin, noted that the dispute between the Building Construction Trades Council and Related Companies was settled this year and the labor group has stopped protesting Related’s use of nonunion labor at Hudson Yards.

Rudin said the deal had paved the way for an agreement between the Real Estate Board of New York and the Building and Construction Trades Council, which was announced last week.

But the conversation took on a more serious tone as the panelists discussed the recent shift in the state legislature.

“I’m anxious of what’s happening in Albany,” said Rechler, chairman and CEO of RXR Realty. “I don’t think we’ve ever operated in such an anti-business, anti-real estate environment.”

He added, “We’re talked about by the activists as the enemy. You think about Occupy Wall Street after the banks collapsed — we’re that today; real estate’s that today. And that’s a tough place to be.”

Said Ross: “Those forces that kept Amazon out are still very active.”

When asked about WeWork, the panelists had mixed views about what is next for the struggling co-working company.

“I’m not worried,” said Rudin, CEO and co-chairman of Rudin Management Company, which has a new building at the Brooklyn Navy Yard, Dock 72, anchored by WeWork. Co-working is an important part of the real estate ecosystem, he said, and “here to stay.”

Ross noted it was still uncertain what would happen to shared office space companies if the economy retrenches. “We’re going to have a recession at some point,” he said. “And seeing if these companies that are in those short-term spaces that are not really highly capitalized are able to survive, and what will happen with that short-term space.”

Still, Related’s new lease with Facebook was seen as a positive sign for New York’s tech industry.

In Long Island City, Gilmartin said her team had been working for the last year on a district-wide innovation plan for the waterfront, which was to house Amazon’s new headquarters before the company withdrew nine months ago.

“While the political calculus around Amazon was off and wrong in so many ways, the economic and location analysis was spot on,” said Gilmartin. “Last year, were in negotiations to partner with a large landowner in Long Island City and shook hands on that site on Valentine’s Day … a few hours after Amazon pulled out.”

She continued, “I think the lessons learned have helped us go back to Long Island City and say, ‘What has to be different?’”

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October 14, 2019

Developers Working on Comprehensive Waterfront Plan, A Series of Public Meetings to be Held

A number of developers that plan to build on the Long Island City waterfront–including parcels where the Amazon headquarters was slated to go–are working on a comprehensive waterfront plan.

TF Cornerstone, L&L MAG and Simon Baron Development are looking to guide the development of 28 acres of public and privately-owned land by Anable Basin and north of 44th Drive. They are reaching out to the public to help them shape the plan and have established “Your LIC” for local input.

The developers will be working with the community and the City Council to put together a series of public meetings in coming months with the goal of coming up with a comprehensive framework.

The City Council gathered stakeholders with developable property along the waterfront during the summer and called for them to formulate a unified plan. The city wants to make sure that the community’s needs are met through one comprehensive plan, as opposed to each developer acting separately.

The developers announced today that Dr. Gail Mellow, former president of LaGuardia Community College, has joined “Your LIC” to help produce the plan by soliciting input from the public and industry.

Plaxall, which plans to develop about 12 acres by Anable Basin and owns much of the land where Amazon was slated to go, is not part of the Your LIC coalition. However, the company has conducted extensive community outreach in recent times and has a decades-long history in the area.

The City Owned Parcels TF Cornerstone was looking to develop

The three developers that are part of the coalition all have interests in the 28 acres.

TF Cornerstone was in the process of developing two city-owned sites where 44th Drive meets the East River– before the Amazon deal led to those plans being shelved.

L&L owns a five-acre waterfront plot at 44-02 Vernon Blvd., known as Lake Vernon, which is north of 44th Drive.

Meanwhile, Simon Baron owns the Paragon Paint building at 45-40 Vernon Blvd., which backs onto Anable Basin.

The three developers, in a unified statement, said that they are working on a collaborative process to bring jobs, a resilient waterfront, open space, affordable housing, and arts and community space to the waterfront.

Matthew Baron, President of Simon Baron Development, said that the process will provide residents with a real say in terms of the outcome of the area.

“With three developers coming to the table to work with each other, the community, and the City Council, we believe so much can be achieved for the benefit of Long Island City,” Baron said.

Jeremy Shell, Principal of TF Cornerstone, said that the collaboration between developers and the community was a unique approach to development in New York City.

“This is a completely new approach for Long Island City and an unprecedented process in New York. We look forward to working closely with Dr. Mellow and all of the residents, businesses, and stakeholders in Long Island City for the months and years to come,” Shell said in a statement.

Mellow will lead community engagement and workforce development initiatives to ensure that the waterfront sites are developed with community input.

She will work with a number of local groups, including NYCHA Tenants Associations, to form recommendations.

“This is such an exciting and important project for our neighborhood and the city at large, and I am thrilled to be doing what I love most – working with the community – to help turn their vision into a reality,” Mellow said in a statement.

The workforce development initiatives and community benefits engagement will be supported in consultation with Bishop Mitchell Taylor, founder of Urban Upbound.

“The Long Island City waterfront provides so much hope and opportunity for Queens, and its future must be planned carefully by the people who live and work here,” said Bishop Taylor, Founder of Urban Upbound.

“I look forward to collaborating with Gail and the Your LIC team to create an inclusive process that prioritizes strong community benefits and good jobs for all.”

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March 15, 2019

MaryAnne Gilmartin’s L&L MAG to develop large site in Long Island City; Current zoning allows for project spanning over 1M sf

Amazon may not be coming to Long Island City, but that hasn’t halted new development in the area.

MaryAnne Gilmartin’s L&L MAG is planning a large, mixed-use project on the waterfront at 44-02 Vernon Boulevard, adjacent to Amazon’s abandoned site, according to Commercial Observer.

The site’s current zoning allows 1 million square feet of residential development and 60,000 square feet of commercial space.

Bruce Teitelbaum, once a chief of staff to former mayor Rudy Giuliani, is one of the investors who own the site. In 2015, Teitelbaum pitched a mixed-use development at the site that included a pedestrian bridge connecting Long Island City to Roosevelt Island, but the project stalled.

The site, formerly an oil refinery, has been in foreclosure since 2012. The current owners are negotiating with an affiliate of the Durst Organization, which owns a $32 million note on the property, Gilmartin told CO.

In December 2018, L&L MAG — a partnership between Gilmartin and the principals of L&L Holding, Robert Lapidus and David Levinson — announced its first development, a 22-story, 460 unit residential building in Chelsea. [CO]