Residential Development

Residential Development

John Tashjian, a principal of Centurion Real Estate Partners and sales and marketing director of the Riverhouse condominiums in Battery Park City, sees a direct link between sales interest in downtown residential properties and the Dow Jones Industrial Average. Nor is it much more of a leap to look at the rising steel of the World Trade Center’s first towers and the twisting metal facade of Forest City Ratner’s Beekman Tower as optimistic spikes compared to such troughs as Silverstein Properties’ vacant 99 Church Street lot (destined for a Four Seasons someday) and other blocks that have remained unchanged despite oft-published renderings of towers in their future.

Below Canal Street, Riverhouse is considered a success story. After a pre-foreclosure filing, a partnership dispute that led to development sponsor Sheldrake Organization’s ousting, stalled sales, and a lawsuit alleging the now LEED Gold–rated building wasn’t green enough, Centurion was able to get sales back on track and has sold 25 units, bringing the total sold to 77 percent, since taking over in April. Tyra Banks and Leonardo DiCaprio have homes at Riverhouse, and the sales office gets visits from at least one Goldman Sachs employee every week.

Other residential properties in Lower Manhattan haven’t been so lucky. Tamir Sapir, a developer of the William Beaver house at 15 William Street, was recently hit with a $130 million lawsuit for failing to repay a Blackstone Group–managed fund that had loaned him $66 million in 2006. The André Balazs-conceived apartment building (its marketing blitz put the call out for sexed-up i-bankers everywhere) had set records for a $3,512-per-square-foot penthouse sale in 2008, but since then some prices have fallen to below $1,000 per square foot and less than 40 percent of its units have been sold.


Some could argue that such tales are just a product of an oversaturated residential market coupled with a down economy, but with Lower Manhattan experiencing some of the fastest growth in any borough—population has more than doubled to 55,000 since 2001—it may be that buyers are choosing playgrounds over party pads.

According to a survey of Lower Manhattan residents by the Alliance for Downtown New York, 27 percent of households have children, and another 40 percent of childless households are planning to have kids in the next three years, finally fulfilling the long-projected transformation of the area from a business-only district to a real neighborhood.

With the World Trade Center filling demand for future downtown office space, developers continue to see Lower Manhattan’s historic skyscrapers as valuable residential property. Last year Youngwoo & Associates bought the former AIG headquarters at 70 Pine Street and plans to develop its 1.1 million-square-foot Art Deco tower into a hotel and residences. A deal to lease the lower floors at Youngwoo’s nearby 72 Wall Street and the adjacent 60 Wall Street to Deutsche Bank is purportedly in the works, though calls to the developer were not returned.

The neighborhood is scrambling to keep up with educational demands too, relying on high-profile locations to house new schools. The Frank Gehry–designed Beekman Tower at 8 Spruce Street will have a pre-K through eighth grade school in its base, which will seat about 630 students when it opens in fall 2011. In addition to that school, Community Board 1 (CB1) lobbied for construction of PS/IS 276, the city’s first green school, which will add 950 kindergarten-through-eighth-grade seats this fall at 55 Battery Place. “Even with that, we are still short seats,” said Julie Menin, chair of CB1. “Schools are one of our main focuses, in addition to playgrounds and parks.”

The growth has elicited competition between developers to create the best self-contained community. Though parents who live in one of Beekman’s 903 rental units aren’t guaranteed a spot for their child in the school below, they will have prime access to a 13,000-square-foot public plaza. The building will also contribute 25,000 square feet to the New York Downtown Hospital. This spring, the Battery Park City public library opened in the base of Riverhouse, thanks to a $3.5 million grant from Goldman Sachs. The investment bank also gave about $1 million to fund a new Asphalt Green community center in Battery Park City, slated to open in fall 2011.

Though the list of local amenities continues to mount, community planners haven’t lost sight of another need: Along with growth in schools and hospitals comes demand for housing that teachers and nurses can afford.

A proposal to rezone North Tribeca that entered the city’s public review process in June would grant greater FAR to developers who build inclusionary housing. Menin is also trying to convince the state and city to develop the World Trade Center Tower 5 site, former location of the Deutsche Bank tower, as a mixed-use building with 20 percent of residential units designated for low-income residents, but any construction there would be years in the future.

While the fate of many other residential buildings and hotels remains uncertain, some are pushing ahead with the faith that occupants will tolerate the construction at Ground Zero, if not come to see it as an amenity.

Opposite the Deutsche Bank site, the long-delayed W New York Downtown Hotel & Residences, owned by Moinian, is nearing completion of 217 hotel rooms and 223 condos atop a restaurant and pedestrian plaza. Just a few doors down at 144 Washington Street, the World Center Hotel has just opened, with a website that boasts unfettered views of the rising World Trade Center.

The construction isn’t just an attraction for tourists. “It’s a huge asset,” said downtown broker Tashjian. “I think it gives a feeling of optimism. We had a buyer recently who was touring his unit with his parents, who lived internationally. He felt like he had purchased something where the skyline was going to change for the better. There’s a real sense of pride and optimism about that tower.”