NYC Real Estate News

Fri, 07/12/2024 - 12:10

A Chinese artist's plans to convert an industrial building in the Garment District into a 66-unit condo so far hasn't been a pretty picture.

A lender has moved to seize 335 W. 35th St. after a plan by painter T. F. Chen to shield the only-partially-redeveloped prewar structure from creditors through a bankruptcy protection filing appears to have fizzled.

On Thursday Shanghai Commercial Bank filed a lawsuit against entities controlled by Chen to end a long-running legal saga and foreclose on the stalled project, for which Chen apparently owes $68 million in missed mortgage payments, according to the Manhattan Supreme Court filing.

Arguing that Chen and his family agreed long ago to surrender their property if they ever defaulted, Shanghai Commercial is asking a judge to pave the way to transfer the site back to the bank and force them to comply with their obligations.

Chen, a portraitist whose art includes takes on famous works by Cezanne and Van Gogh, has not yet filed a formal response to the complaint.

But even as the bank is a step closer to grabbing the property, Shanghai Commercial still faces a $1.6 billion countersuit from the Chens for allegedly steering the family into loans with what they call deceptive and unfair terms, including personal guarantees.

“The foreclosure process does not change our clients’ legal position,” said Chen lawyer Leo Jacobs, whose website touts him as a “legal psychiatrist to billionaire real estate developers.”

In 2016 Chen and his family purchased 335 W. 35th for $50 million and three years later won state approval to begin sales for a condo called The Society House that would have hauled in about $91 million, according to its offering plan. Studios started at $775,000.

According to court filings, Shanghai Commercial Bank issued $61 million in several mortgages for the project, which is between Eighth and Ninth avenues near Penn Station. But Chen never paid off the loans when they matured in 2021 and also failed to make any payments after two subsequent deadlines, the bank claims.

The Chens owe $56 million in unpaid principal plus $12 million in interest, according to the lender.

The Society House faces a tall stack of unpaid bills. Queens-based Millstone Construction, for instance, says the Chens still owe the company $1.6 million, according to court filings, though the Chens claim the contractor is overcharging the family.

The condo, which is enveloped in construction-site-style safety netting, faces other challenges. The Chens owe almost $4 million in unpaid property taxes for the site after not having paid any since May 2022, according to public records.

And a stop-work order exists at the property, which has more than three-dozen unaddressed Department of Buildings violations, according to public records, though the developers have resolved other violations.

As the bank initially moved to foreclose in January, the Chens filed for Chapter 11 bankruptcy protection for the site, a fairly common strategy to protect endangered real estate. A couple of months later, the family similarly turned to the courts to protect 250 Lafayette St., a small SoHo commercial building housing the Chen’s 23-year-old nonprofit galley space, T. F. Chen Cultural Center, as well as the clothing boutique New York or Nowhere.

The building, which the Chens bought for $600,000 in 1995, according to the city register, was used as collateral for some of the Society House loans. That separate bankruptcy case remains unresolved.

But on July 2 Judge John Mastando of the U.S. bankruptcy court of the Southern District said Shanghai Commercial could restart its efforts to seize the stalled condo.

T.F.Chen, whose full name is Tsing Fang, and his wife, Lucia, immigrated to the Washington, D.C., area from Taiwan in 1980, according to the center’s website, and the couple operated art galleries in D.C. and Lower Manhattan through the years. Their daughter, Julie, and their son, Ted, who work at the family firm, are also named as defendants in related Society House litigation.

Lucia Chen, who handles art sales for her husband, has staged more than 200 shows of his, the site says, while also becoming “a very successful real estate mogul and entrepreneur.” But she doesn't ever seem to have undertaken residential development before Society House.

Jesse Loffler, the bank’s attorney, declined to comment.

Fri, 07/12/2024 - 12:06

Federal prosecutors have indicted a pair of former postal workers for a check-cashing scheme that bilked more than $4 million dollars in government checks from a JFK Airport mail facility, according to court records unsealed this week.

Following a 21-month investigation, law enforcement officials accused Queens-resident Kevaughn Wellington, 31, and a New Jersey-based accomplice, Ky-Mani Straker, 24, of allegedly stealing some 125 checks intended for people receiving COVID-19 stimulus funds, Social Security benefits and tax refunds, court records show.

Breon Peace, U.S. Attorney for the Eastern District of New York, described the operation as “one of the biggest thefts at John F. Kennedy International Airport.”

Prosecutors, in a nine-page indictment, outlined how Wellington, Straker and others allegedly pilfered the government checks between roughly June 2021 and August 2023.

Both Wellington and Straker worked at the mail facility in JFK where parcels are sorted for distribution locally and abroad. As part of Wellington’s position there, he was responsible for opening and sorting sacks of mail, and he helped himself to some of the parcels containing checks that were then sold off for others for cash, according to prosecutors.

In one November 2021 communication, Wellington sent an image of a U.S. Treasury check to Straker. In another message that month Wellington shared a list of checks he said he was willing to sell, along with the value of the stolen checks and the amount he wanted for each of them — in some cases that was 30% of a check’s value. Some of the checks exceeded $1,000.

Straker, in one August 2022 message, shared images of four checks with Wellington, stating “[t]his from the last batch I picked up,” according to court records.

Prosecutors have charged Wellington and Straker with conspiring to steal government funds, theft of government funds and possession of stolen mail, among other charges.

Both men were arraigned and released on bond in Brooklyn federal court Wednesday.

Fri, 07/12/2024 - 12:03

Raymond Kessler, once known as "The Haiti Kid," remembers the cheers as he wrestled professionally against opponents like Hulk Hogan. Today, at 76, the roaring crowd is replaced with his neighbors at The Woodstock Hotel. Kessler is one of 290 tenants in the permanent housing facility owned by Project FIND, which has been improving seniors’ lives for over 50 years.

His arc underscores a profound truth: anyone, regardless of past success, can find themselves in need of affordable housing. And as housing becomes increasingly scarce, we applaud efforts to bolster housing security via The City of Yes for Housing Opportunity plan. 

City of Yes is a planning framework to boost housing production in the city. We commend Mayor Adams’ bold vision, inspiring hope for a more accessible future for all. However, no legislation is perfect to start. Currently, certain provisions may have unintended consequences, especially the Universal Affordability Preference (UAP), which replaces the Voluntary Inclusionary Housing (VIH) program.

VIH preserves affordable housing stock and provides capital to maintain quality living environments. The plan’s 10-year phase-out of density bonuses and other changes, though well-meaning, may harm organizations like ours, which depend on these incentives to build and operate housing for middle- and low-income communities.

Importantly, the plan lowers the bonus ratio in R10 districts. The city currently permits developers to build beyond the maximum ratio of building-size-to-footprint for providing certain public benefits, like affordable housing units. City of Yes lowers this ratio, increasing construction costs without offsetting them – disincentivizing developers from building additional affordable housing units. Removing certificates, a funding source for non-profit developers, exacerbates this. 

The City of Yes’ impacts are not theoretical, they have real-life consequences. With VIH funding, we are installing needed upgrades at our Upper West Side Hamilton House location, like a new boiler, updated electrical, and free Wi-Fi. These improvements enhance tenants’ quality of life, particularly for seniors with mobility challenges or who remain unconnected to modern technology. Removing that critical funding source would jeopardize our ability to complete those upgrades. Similarly, the Woodstock Hotel, where Kessler lives, direly needs modernization that would be threatened by proposed changes in the City of Yes. Improvements like new elevators and ADA-compliant bathrooms may not happen, as they depend on the sale of air rights under the current VIH program. However, the City of Yes risks drying up the market for this valuable asset. Further, the potential lost value of unsold air rights would negatively impact our balance sheets and negate our ability to finance future affordable housing development deals.

Given these concerns, the City Planning Commission and City Council must carefully amend City of Yes policies. While its goals are commendable, certain policies must be tweaked to ensure they don’t accidentally decelerate affordable housing production.

Raymond Kessler’s story reminds us that real people are impacted by these policies – and that preserving incentives helps sustain affordable housing access for those like him. Industry experts and experienced developers must be heard to avoid unintended negative consequences that prevent New Yorkers from accessing the housing they need and deserve. 

As Mayor Adams addresses housing scarcity, developments like Project FIND’s must be protected. Keeping provisions like density bonuses in R10 districts and maintaining existing certificates’ value will enable the City of Yes to produce more affordable housing.

This proposal can be a force for good. But without addressing these concerns, it risks doing more harm than good. Let us take time to get this right so the City of Yes lives up to its name. 

Mark Jennings is the executive director of Project FIND, a non-profit that operates four supportive housing residences. He is also an adjunct professor at NYU's Silver School of Social Work. 

Fri, 07/12/2024 - 12:00

A new condominium in Kips Bay combines the personal and professional under one roof. On the corner of Second Avenue and 29th Street, Hendrix House offers 60 residences and an amenity package that is extremely functional for the modern New Yorker. Not only is there a stunning co-working space and lobby with an adjacent courtyard [...]

The post Kips Bay condo fits personal and professional under one roof, studios from $895K first appeared on 6sqft.

Fri, 07/12/2024 - 11:18

New Yorkers have paid 58% more in food-delivery fees since before a minimum-wage law went into effect in late 2023, according to a city agency report, suggesting that restaurant-delivery services have passed on the bulk of these rising costs to customers.

While merchants also paid more fees to food-delivery services offered by Uber Technologies, DoorDash and Just Eat Takeaway, the parent of Grubhub and Seamless, it is customers who are bearing the brunt of the impact. People who placed orders through such apps paid an average of $20.1 million a week in delivery fees during the first quarter of 2024 — a 58% increase from a year prior. By comparison, fees paid by participating restaurants increased 13% over the same period.

The report, released Thursday by the New York City Department of Consumer and Worker Protection, shows that food-delivery couriers’ overall earnings grew, even as tips fell sharply. Wages rose to an average of $19.26 an hour, an increase of 64% from a year earlier, before the minimum-pay rule became law. Tips declined by 60% in the same period.

The city’s findings underscore the impact felt by consumers and local business owners as food-delivery companies defend their margins against new regulations in various markets.

Uber Eats, DoorDash and Grubhub all responded to the new minimum-wage rule late last year by raising service fees and modifying the in-app tipping function so that the upfront delivery cost would seem lower. The companies have also implemented scheduling systems to limit the number of couriers working at a given time.

The report also found that the number of contractors delivering food fell 9% in the first quarter from a year earlier. Representatives from Uber Eats, Grubhub and DoorDash point to the decline as proof that the minimum-pay model isn’t working.

“This rule is a job killer and the antithesis of why millions of people choose app-based work,” said an Uber spokesperson, claiming that Uber Eats has 12,000 fewer workers than before the rule went into effect and that “the couriers who are still able to work need to work much harder, doing 80% more deliveries per hour than they did” before the rule change.

A Grubhub spokesperson said in a statement that “DCWP predicted in its 2022 study that couriers would earn more, but that earning opportunities would be concentrated in fewer hands,” adding that the report “shows that this is true.”

A representative for DoorDash called the minimum-wage policy “extreme and broken,” adding that the rule has led to increased costs for customers, which translates to fewer orders and fewer earning opportunities for couriers.

“We will continue what we’ve been focused on since these policies took effect — working to find a better approach that works for Dashers, merchants and customers alike,” DoorDash said in a statement.

DoorDash, the largest food delivery service in the US, downplayed the impact of new minimum-wage rules in cities like New York and Seattle in its latest earnings report, saying it saw less than a 1% reduction in orders in those two cities.

Meanwhile, Thursday’s report suggests that orders have been broadly increasing, not decreasing. Delivery workers completed about 2.8 million deliveries per week in the first three months of the year, according to the DCWP — an 8% jump from the same time period a year earlier.

“These strong results show yet again that we don’t have to make the false choice between business growth and workers’ rights, said Ligia Guallpa, the executive director of the Worker’s Justice Project, a nonprofit that lobbied for the minimum-pay legislation.

Fri, 07/12/2024 - 11:03

Look out golf: Pickleball is coming for your corporate schmoozers.

While golf courses have long been hailed as the premier venue for closing deals and wooing clients, a growing number are finding that pickleball saves them time and money — while being more inclusive and easier to play for newcomers. Corporate bookings at pickleball clubs across the U.S. spiked in June from the previous month, according to PodPlay, a sports venue booking platform.

Individual pickleball club operators back this up, saying that company events are increasing exponentially. Ace Pickleball Club, with locations in various states, has had a steady flow of corporate gatherings, co-founder Joe Sexton said, with event requests at new locations piling up even before they open. Greg Raelson, chief marketing officer of Pickleballerz club in Chantilly, Virginia, said corporate bookings have roughly tripled since 2021. In New York, Life Time Fitness is fielding 10 to 20 corporate booking inquiries per week — more than five times last year’s volume.

The court is becoming especially popular among lawyers, bankers and realtors looking to expand their professional circles. In Rochester Hills, Michigan, pickleball instructor Robert Dunn said he sees lawyers with clients, business types talking shop and auto industry executives bringing suppliers and purchasers to play. “Even if the intent isn’t business, business is often a topic of conversation,” Dunn said.

Chicago-based real estate broker Colin Hebson said he’s observed a similar trend and has become a convert himself after using the golf course to entertain for 25 years. A key part of the appeal is that pickleball is much less intimidating than golf for those who haven’t played before.

“If you’ve never golfed before and I invite you on the golf course because I want to network with you and do business, it’s almost impossible to be able to keep up,” he said. “I can take someone onto the pickleball court who has never touched a pickleball paddle before, and I can show them how to play and they would have a good time in under 10 minutes.”

It’s also much more efficient: Hebson can finish a couple of games of pickleball in under two hours, versus taking half the day to golf. To top it off, two hours at Hebson’s pickleball club cost $80, versus $600 to $700 to entertain on the golf course.

Mathew Norman, senior director of events at a South Carolina pickleball club called Crush Yard, said companies are seeing a greater return on investment with pickleball. “Everyone involved spends more time with each other under one roof and the event time is a max of three hours instead of five,” he said. This allows executives to schedule events starting around 4 p.m., so staff can still work most of the day. So far this year, Crush Yard said it has already put on 10 events for companies that normally do golf.

Golf, of course, isn’t going anywhere. The sport experienced a surge in popularity during the pandemic, and the National Golf Foundation said recently that on-course golfers have increased for six straight years and golf is gaining popularity with women and people of color. Even with these inroads, 74% of golfers are still men and 78% are white, according to the foundation. This has prompted some die-hard golfers to shift to pickleball in order to tap into a broader and more diverse pool of clients, according to Richard Green, co-founder of pickleball club SPF Chicago.

After noticing that some of their colleagues seemed less than jazzed about an afternoon on the green, executives at one Chicago-based marketing company decided to host a pickleball tournament this year.

“They saw pickleball as a way of reaching out to get more engagement out of employees who don't like to golf,” Green said.

Minneapolis, Minnesota-based life coach Jasna Burza began inviting clients to play pickleball when she realized it would help them to loosen up. Burza, who works with executives, lawyers and entrepreneurs, said it’s a welcome alternative to the golf course for many of the women she coaches. “A lot of my women clients are like, ‘I have kids, I don't have time to spend seven hours on the course,’” she said.

It’s also been transformative for her relationships with clients who do golf, many of whom she used to walk the green with. “There are no pretensions. You see them miss a point. There’s so much vulnerability on the court,” she said. “What I love is that you see adult men and women engaging in trash talk. People are competitive, but it’s not as serious as golf.”

Fri, 07/12/2024 - 09:30
Pressurized walls are not allowed in many NYC rental buildings. Freestanding bookshelf walls, which are not attached to the ceiling, walls, or even floor, are an acceptable alternative. They are also more popular and customizable than ever.
Fri, 07/12/2024 - 08:00
Façade installation is continuing on The Duchess, a 22-story residential building at 300 East 83rd Street in the Yorkville section of Manhattan’s Upper East Side. Designed by SLCE Architects and developed by Lalezarian Properties, the 235-foot-tall structure will span 93,682 square feet and yield 70 condominium units with an average scope of 1,305 square feet, as well as cellar level and ground-floor retail space. A portion of the homes will be reserved for affordable housing. The property is alternately addressed as 1594-1598 Second Avenue and located at the corner of East 83rd Street and Second Avenue.
Fri, 07/12/2024 - 07:30
Simone Development Companies and Fareri Associates have announced that Summit Health, a physician-led, patient-centric healthcare network, has signed a long-term lease renewal and expansion at 644 West Putnam Avenue in Greenwich, Connecticut. The agreement will see Summit Health renew its existing 14,243-square-foot space on the ground and second floors while adding an additional 5,610 square feet on the second floor, bringing the total leased space to 19,853 square feet.
Fri, 07/12/2024 - 07:00
Permits have been filed to expand a ten-story structure into a 29-story mixed-use building at 219 East 42nd Street in Midtown East, Manhattan. Located between Second and Third Avenues, the former Pfizer headquarters is a short walk east of the Grand Central-42nd Street subway station, serviced by the 4, 5, 6, and 7 trains. Metro Loft is listed as the owner behind the applications and has plans to convert the commercial buildings into 1,500 apartments.