Friday, July 29, 2011

Flushing/Willets Point Overbite

The Flushing Times is reporting on the serious overdevelopment problems that are facing Flushing-and by extension the proposed Willets Point development as well: "And today a survey of the Flushing area reveals that a series of large-scale development projects totaling several billion dollars has been approved to be built over the next several years.But even the best-laid plans often end in the dustbin of history. Those high-profile projects are facing significant obstacles and may be scaled back significantly or never even break ground."

Is Flushing the canary in the mine shaft for development in NYC? There are some who think so: "That prospect does not portend well for the future of New York City’s real estate and construction industries, the magnates of which are waiting to see if the Flushing boom turns out to be a bust before throwing big money at development proposals across the five boroughs. That increased focus on the neighborhood has cast Flushing as something of a bellwether for the city’s residential housing industry."

The big Sky View project is a case in point. After an initial run of enthusiasm, the project has stalled:

"The project at the intersection of College Point Boulevard and Roosevelt Avenue seemed poised to flourish. Over the next couple of years, more than 100 buyers closed contracts on condos at the development.

But that surge of interest turned out to be temporary and as of last week only 42 condominium units were under contract, according to Helen Lee, director at Onex Real Estate, the partner company that took the lead on Sky View Parc from Muss in early 2010.

Once-spoken-for condominiums remained empty as the financial downturn took its toll on buyers’ wallets, and 118 people backed out of their contracts, settling with Onex for 75 percent of the $5 million total deposit they made on the homes, according to court documents. A lawyer for the condo buyers said it was the largest such settlement in the history of New York City."

Then there is Flushing Commons, our favorite example of overreach: "Last July, the city approved TDC’s proposal to build Flushing Commons, a mixed-use project with a price tag of more than $800 million, in the space currently occupied by Municipal Lot 1 in downtown Flushing. But the company has yet to secure the funding it needs to move forward on the condominium-centric development. TDC has turned to Chinese investors and possibly breaking the project’s construction down into phases in hopes of getting a shovel into the ground soon."

The one ray of sunlight? Well, perhaps that would be the fact that if these massive developments are fully built out the city might be able to take a deep breathe and allow the mass transit infrastructure-badly overburdened-to catch up to all this.

Then there is Willets Point-where EDC is hell bent to proceed in the face of all the uncertainty: "With the economy still depressed, several other major projects, including the city’s $3 billion proposal to overhaul Willets Point, have yet to emerge from the planning stages. Several sources close to the Willets plan, which Bloomberg announced in May 2007, say the project faces massive uncertainty. At least one builder plans to ask the Bloomberg administration to push the deadline for development proposals back several months. And three sources said few companies plan to submit proposals because the project is too unwieldy, inflexible and expensive to justify the risk during this time of financial uncertainty."

Shades of New London! Remember how that city had used eminent domain to remove Suzette Kelo and her neighbors from their homes only to see their huge project fall apart when drug giant Pfizer went limp on them? The same field of bad dreams could be repeating itself on the Iron Triangle-and this time, just like in New London-it is the tax payers money that's at risk.