The Ultimate Urban Traffic Jam

Manhattanites are familiar with traffic jams, which are exacerbated by some of our urban-congesting events: more than a dozen mid-town parades annually; the days the U.N. is in session; the NYC Marathon; Fashion Week; visiting dignitaries; and other traffic hindering events such as street fairs and the occasional protest. For the most part, Manhattan dwellers are good sports. We roll with the punches and our excellent, well-trained police department and mayor seem to have these events more or less under control.

NYC 5th Avenue. All traffic blocked off

Those of us who run a business and have to move around mid-town have however now been burdened with what appears to be a constant hindrance with no end in sight. Since our President-Elect Trump has made a unilateral decision to conduct most of his government business from his palazzo atop Trump Tower at Fifth Avenue between East 56th and East 57th Street, this major inconvenience to New Yorkers, the condominium owners who reside in Trump Tower, tourists and especially the merchants whose shops are inaccessible, is likely to continue for the duration of the Trump presidency.

NYC 5th Avenue near Trump TowerRather than conduct this business in Washington D.C., where office space was allocated for this purpose, President-Elect Trump has leased out several floors in Trump Tower, which the Trump Organization owns, to the U.S. government at taxpayers’ expense, in the most expensive office rent district in the country.

Even if you are not among the distressed New Yorkers trying to work your way around police blockades and the monstrous traffic jams created when Fifth Avenue and the adjacent side streets are closed to traffic, taxpayers around the country should be appalled at the cost of maintaining expensive office space in Trump Tower and the cost of our local police protecting Trump and his family at Trump Tower.

NYC 5th Avenue. All traffic blocked offNYC Mayor de Blasio has requested reimbursement of $35 million. This expense to the city covers a total of 53 days – the time between the election and the inauguration on January 20th.

So far, the Federal Government has only agreed to reimburse the city for $7 million. New Yorkers don’t want the difference on their tax bill. NEW YORKERS ARE SAD AND MAD!

NYC - Trump Tower

January 1, 2017 – The Opening of an Initial Segment of the Illusive Second Avenue Subway – Hooray!

On New Year’s Eve, December 31st, 2016, Governor Cuomo, Mayor de Blasio, and other city officials, will pop the champagne corks as they are given the very first ride on the Second Avenue Subway!

Approximately 100 years ago in 1910, discussions for the construction of the illusive Second Avenue Subway were begun. At the time, there were elevated subway lines on Second and Third Avenues. These were demolished in the 1940s and early 1950s, as real estate developers became hungry for new sites to develop high rise residences and were looking to gentrify these neighborhoods. By then, numerous plans for a Second Avenue subway had been created and abandoned because of various fiscal crises.

BY 2.0,

By Metropolitan Transportation Authority of the State of New York – Second Avenue Subway: 72nd St.

Because construction stops and starts on the project occurred over the years, beginning in the 1970s, there are a number of “ghost stations” which were created but will never be put into use because of constantly changing routing of the planned subway.

CC BY 2.0,

By Metropolitan Transportation Authority of the State of New York – Second Avenue Subway: 72nd St.

It has taken nearly a century, during the terms of 14 mayors, 12 governors and dozens of transit leaders to complete the first phase of the Second Avenue Subway tunnels and the stations now located at East 72nd Street, East 86th Street and East 96th Street and Second Avenue.

The inaugural opening of the completion of the FIRST PHASE of the Second Avenue Subway for the public will take place on January 1st 2017. This underground project which was begun in 2012 has cost $4.5 billion. So much for the feasibility of infrastructure projects in large cities.


By Jim Henderson

My Dealings with “The Donald”

A snapshot of the practices of Trump the Real Estate Developer

Having spent over 40 years selling high-end residential real estate in Manhattan, Donald Trump, the Republican candidate for President and I have had repeated business dealings together. I participated in focus advisory groups for his luxury residential developments and subsequently sold condominiums in his Manhattan condo buildings. So here’s a little insight about how he created his real estate empire in New York City. Please judge for yourself if this is the type of business judgment that you would desire in the person who might be elected to be the leader of the free world.

credit: 1981, Donald Trump built his first major building on the corner of East 56th Street and Fifth Avenue, appropriately named, TRUMP TOWER, by purchasing and demolishing the department store, Bonwit Teller, buying the air rights over Tiffany’s and creating what he labeled as a “public space” on Madison Avenue. When the candidate says that he has always had politicians in his pocket, he is probably correct – or at least he was correct when he put this unusual, rather convoluted real estate transaction together.

Who actually built the Trump Tower?

The demolition required to build Trump Tower was done by 200 undocumented Polish immigrants who were ostensibly paid $4-5 an hour, off the books. Rather a contradiction for a candidate who wants to deport all undocumented immigrants, who are “stealing American jobs”! In 1983, a lawsuit was commenced for unpaid labor union pension and medical obligations. The case dragged through the courts triggering appeal after appeal until it was finally settled for an undisclosed amount in 1999 – 16 year later.

Peeking under the hood to find out why these buildings were made with concrete

The respected journalist, David Cay Johnson, publicized the fact that the construction of Trump Tower was designed as a concrete structure rather than a steel structure which was state of art at the time. Furthermore, the concrete for this and other Trump developments was purchased, Johnson pointed out, from HRH Construction, owned by Anthony, “Fat Tony” Salerno, the head of the Genovese Crime Family and “Big Paul” Castellano, the head of the Gambino Crime family.

The mystery of Donald Trump’s floor numbering

Donald Trump’s other claim to fame was the art of misnumbering the floors in his buildings to his advantage. This sleight of hand began with Trump Tower whose elevator buttons have numbers indicating 68 floors, when the building actually has 10 fewer floors. Since Trump Tower has the atrium and commercial floors beneath the residential tower, he just started numbering the homes as beginning on the 30th floor, when they were in actuality on the 20th floor!

Is Trump the owner – or not?

The other “real estate surprise” is that most of the buildings that Trump originally built or developed are not actually owned by him. He sold his interest in the properties and allowed the buyer to license his name on the properties. Another clever illusion that he turned into a profit.

The question which one must ask oneself is, will all of this trickery go down in the world of international politics, where he claims that he will break treaties and contracts at will and “make America great again.”

I wonder if the 200 undocumented Polish workers will be part of the 17 million plus deportees.

The re-birth of 56 Leonard Street, Tribeca

56 Leonard StreetIn an environment where Manhattan real estate inventory is at the lowest it has been in seven years, the perfect environment has been created for the continuation of the iconic Herzon and de Meuron 60 story Tribeca condominium tower. Begun just before the real estate bubble burst in 2008, the developers, Alexico and the Houston based Heines Interests LP, have chosen the perfect moment to create this architectural masterpiece – 145 individual residences, each with private outdoor space. The building gives the illusion of angled stacked lofts with floor to ceiling windows capturing fabulous Manhattan views.

It will have a base accentuated by an Anish Kapoor’s polished metal sculpture. Our firm, Corcoran Sunshine is the marketing agent. During the first ten days, the initial offerings have been a sell-out.

Make no mistake, this development will be the most architecturally significant structure in lower Manhattan.

It is a quality address that is attracting international as well as domestic purchasers. Prices are expected to rise significantly as the construction continues – the wise purchaser will act to secure some of the most select units.

It’s a Ill Wind that Doesn’t Blow Someone Good Luck – NYC RE Market Update 1/15/2013

What happened to the NY Real Estate Market in the third Quarter 2012? It soared!

Well, for one thing, a lot of pent up demand was accumulating during the fourth quarter while the most publicized presidential election in history was going on. At the end of the day, even those folks who didn’t live in Ohio, were so fed up hearing about the election that they would have done almost anything to have it resolved. A large part of the population that are not political junkies just wanted it over and decided so that they could make some business and financial decisions. Markets, be they on Wall Street or in the world of real estate, hate uncertainty.

Finally on the evening of November 6th, the election was decided in favor of the Democrats and even many Republicans breathed a sigh of relief. People knew that capital gains would be raised, and income taxes increased on “the 1%,” although they were not certain by how much. Consequently they were on the move to liquidate securities where they had large gains and to sell real estate and close by the end of 2012. With a rush to the finish line, attractive deals were made to accommodate sellers desired year end closing dates and as a result, a lot of inventory was eaten up. In other words, it was a great 60 day bull market in real estate.

So where does this leave us at the beginning of 2013? Now that the so-called “Fiscal Cliff” nonsense has been resolved, people have a solid basis on which to make decisions about real estate, which is positive, but guess what? The shelves in the store are bare, and buyers have Wall Street bonuses burning a hole in their pockets. Potential sellers are sitting on their hands and evaluating what is that they want to do with their homes; consequently inventory is at the lowest level since 2007. Low inventory equals higher prices and numerous listings have been bid over the asking price with many disappointed buyers left in the dust.

Lesson to be learned: timing in life is everything, especially in real estate markets. The next time listen to your agent and act when there is market uncertainty when you may need some courage to take the leap, but are likely to get a good buy.

The Toll Brothers are on a NYC real estate buying spree

Having cut their teeth on residential projects in waterfront areas in Brooklyn and New Jersey, the Toll Brothers, continued to play Monopoly with additional Manhattan purchases. A publicly traded company who consider themselves one of the largest US developers of luxury multi-family residences, the Toll Brothers seem unafraid of building sites that have been shied away by others partially because of the difficulties involved in site development.

Their first Manhattan development was at East 64th St and Lexington Avenue, involved assembling a corner site by buying up adjacent townhouses. The completed development, called the Touraine is now fully sold out. The quality of the finish was significantly higher than their previous developments as they hoped to make this their flagship Manhattan project. It was well received.

NYC Real EstateIn the meantime, the Toll Brothers acquired two mid-block Park Avenue townhouses on Park Avenue between East 89th Street and East 90th Street. Their development plans, which required new interpretation of the zoning laws and overcoming much disgruntlement on the part of the residents of the Carnegie Hill neighborhood, delayed demolition of the existing structures for a number of years. Some of the apartments in the adjacent structures required sealing up existing windows in these luxury pre-war cooperatives thereby diminishing their value. Nevertheless, the Toll Brothers plodded on. One of the townhouses has been demolished and the remaining one is due to begin demolition in a few weeks, after which the excavation will begin. Developers with deep pockets who can afford to wait and hold, seem to be the ultimate profit takers in Manhattan real estate.

At the end of 2012, the Toll Brothers took advantage of a seller’s desire to close before the end of the year, to get a good deal on a 200,000 square foot site at 76-86 King Street in West Soho, formerly known as the “Printing District”; they paid $56.5 Million for this site, or just under $300. per buildable square foot. Again, some re-zoning of this former manufacturing district is required, however the local community board has given its thumbs up approval to the re-zoning.

In addition, the Toll Brothers purchased the somewhat troubled site at 961 First Avenue for $64 million. It is located on the corner of East 53rd Street, across the street from the “Grand Beekman” condominium that was successfully developed by Alexico in 2003.

These motivated sellers were anxious to conclude these sales to avoid potential higher capital gains in 2013.

Lesson learned: He who has deep pockets can afford to take advantage of good opportunities. As a result of their successful acquisitions, the Toll Brothers may not have grown in popularity but their stock has increased in value by 13% in 2012.

Ever Wondered What is Happening on Governors Island?

Governors Island is a 172 acre (70 hectors) island in Upper New York Bay, one-half mile from the southern tip of Manhattan Island and separated from Brooklyn by Buttermilk Channel. The island is recognized as the birthplace in 1624 of the State of New York.

It originally started as a flat, treeless 103 acre (42 hector) island, but its size was increased to 172 acres when clever New Yorkers, under the auspices of the Army Corps of Engineers decided it would be an excellent place to deposit the 4,787,000 cubic yards of fill obtained from the excavation of the Lexington Avenue subway in 1912.

The name, Governors Island was adopted in English Colonial Times when the island was used exclusively by New York royal governors. A fortress was built on the island in 1624. Subsequently it was used by the Continental Army troops as a defense post to protect the Continental Army from the British troops during the American Revolutionary War. From 1783-1966 the island was a United States Army post, owned by the U.S. government. From 1966 to 1996 the island was a United States Coast Guard installation. In 2001, two of the island’s historical fortifications, Fort Jay and Castle Williams were proclaimed National Monuments.

In 2003, 150 acres of the island were transferred to the people of New York for $1.00, much to the vexation of many developers who had been hoping to be able to purchase it turn it into a resort Mecca with gambling casinos. The remaining 22 acres of the island which were kept by the Federal government have been designated as “Governors Island National Monument” to be administered by the National Park Service.

In 2009, a 3 acre commercial organic farm, operated by the non-profit organization, “Added Value” was launched. Subsequently the New York Harbor School, a small public high school in Bushwick, Brooklyn relocated to Governors Island in 2010. It was the island’s first tenant. Artist Studios, run by the Lower Manhattan Cultural Council, also opened in historic building #110 in 2010.

The combined use of Governors Island as a recreation area, national monument, and a place for educational and artistic facilities, is a stunning example of what government can do best: preserve a national treasure for regulated, sustainable public use.

Governors Island is accessible by ferry from Manhattan and Brooklyn.

News from the Chelsea Market/Meat Packing District

This former industrial warehouse district which was transformed over the past 15 years into an Epicenter for fashion, tech, media and food companies has grown steadily in popularity as an office space district for these industries. The 3.9% vacancy rate for office space in the areas 83 office buildings is the lowest in Manhattan.

IMG_2557To fulfill this demand, Jamestown Properties, an acquisition and management firm based in Cologne Germany and Atlanta, Georgia, who are the owners of the landmark building known as the “Chelsea Market”, the block long former bakery of the National Biscuit Company, “Nabisco”, have been given a permit to build two office towers atop the squat structure. In spite of strong community opposition to the development, because of concerns about increased pedestrian and vehicular traffic in the area, the two towers, one eight stories and the other seven stories, will provide a total of 300,000 square feet of additional office space. They are scheduled to be completed in 2015. At present some of the ground floor retail space is being revamped to accommodate smaller users, most of whom are purveyors of fine foods.

The Chelsea Market is a former collection of industrial buildings occupies a full city block between Ninth and Tenth Avenues and West 15th and 16th Streets. It abuts the former elevated railroad line, known as “The High Line”, which was transformed into an extremely popular multi-use elevated pedestrian park.

Across the street, at 437 West 16th Street, a 23,536 square foot boutique office building, which was renovated to be creative-work ready “green and energy efficient”, is being put on the market. A single use buyer/user would be wise to purchase it as to hedge against the steadily rising rents in the area.

The Meatpacking District has become a Mecca for out-of-town tourists as well as Manhattanites who wish to indulge their palates at some of the popular star-chef restaurants: Buddakan, Del Posto, Morimoto and Spice Market, to mention a few.

I must say, the district has come a long way from when I purchased a loft there at 345 West 13th Street in 2002 at which time the meat packing industry was still in full swing, with blood literally running in the streets in early mornings, as meat was delivered and carcasses carved on the back of trucks. A neighbor of mine who purchased his loft at a still earlier stage of gentrification in 1994 recalls how a limo driver looked at him in disbelief when he brought him home one evening with, “You really live in a neighborhood like this with kids?”