As part of the AN developers feature, Matt Shaw interviewed representatives from four developers who are innovating in New York and elsewhere using alternative models for development. These perspectives offer new ways forward as the architecture and business communities work together to find new design, housing, and community-oriented solutions to our 21st century urban issues.

Sumaida + Khurana

Up-and-coming developer Sumaida + Khurana is bringing high-profile international architects to do its first buildings in New York, including NoLita condos by Tadao Ando and a forthcoming 400-foot midtown tower by Alvaro Siza. Amit Khurana has more than two decades of experience in the real estate industry, while Saif Sumaida holds an architecture degree from the Cooper Union. Together, they are changing how New York development is designed.

Matt Shaw: How did you end up working together as developers?

Saif Sumaida: I graduated from Cooper Union with a degree in architecture, and the education was very rich in discourse and concepts. Just by accident, I actually ended up in construction, and over the last 23 years, I’ve been building in New York. I like working as a developer because you have control of authorship both from a construction and architecture perspective, but also as the developer when you put the vision together.

Amit Khurana: Saif is tremendously experienced and when we met it was an interesting fit just because I love architecture and design. I have to give Saif such credit for this but when we are in a room with an architect and we sit down, his knowledge is so fantastic, to not only think of just construction but to think of how architecture relates to construction. And I think that it was a unique situation because there was a shared vision and very complementary sets of skills.

What do you feel these projects bring to New York as a city, not just for the residents of the buildings?

AK: We see ourselves as developer/custodians of the built environment and ultimately we have a responsibility because we play a very important role that really changes the city. Small or large—it doesn’t matter. It’s about uplifting people, and fulfilling the dream of the city too, right? I think if you ask anyone, at the end of the day people appreciate excellence. It’s not about the asset type, it’s not necessarily about who is going to live there or rent there or work there. It has something to do with a kind of purity of design and the impact it has on people.

SS: I think the problem is a lot of developers are really looking at buildings as commodities to monetize. But I think there is a legacy to be made in selecting the architect and making something that has meaning and has a place in the fabric of the city and that is something that you’ll ultimately be proud of. We want to create places. We feel that we have some sort of a social responsibility to do that.

Why bring in these architects?

AK: New York is a melting pot with a lot of influence from outside. We also came from different countries although we spent so much time here. We wanted to just focus on, in a very pure fashion, this idea of bringing master architects to New York to design their very first buildings here. Especially in New York where as-of-right sites are such a tremendous opportunity to work in a specific way and to push the envelope a little bit. looking at it and finding a site, we’re actually looking for a site for Ando or for Siza. This inverted process allows us to think about things a little bit differently.

SS: A lot of developers rely on marketing people to tell them what has worked. They’re following formulas because they believe that these are the formulas that will get them the profit. People find a proof of concept and just follow it. You don’t have to think too much. When you bring somebody else from abroad or somebody who hasn’t built anything in New York, they actually bring a certain amount of freshness. What’s amazing about New York is that it allows for this diversity. You can still be visionary and make it successful.

Do you think that your experience as an architect lets you work with these architects in a different way rather than other developers?

SS: I think the one thing is, I’m very respectful of the process. I’m always able to talk to architects in their language. Instead of looking at it, again, as a commodity, I can engage them in their concepts and be able to enter that dialogue and be able to discuss it with them as opposed to always looking for an end product. I can enter the process and into a discourse with them so that once I understand what they’re trying to do we can then figure how best to get there.

You mentioned affordable housing a little bit. Do you see that as a project that could be interesting to take on?

SS: Very much so. I think there’s a responsibility for developers to be able to bring to the city various projects. It can’t just be building for the wealthy, you have to be able to do it for all. Otherwise, you’re not really making an impact in the city as you think you are. To make an impact on the city you have to touch on the various fabrics.

AK: Well I think that it’s also responding to the realities of where you are in a market cycle. Currently we’re in a market where land is insanely expensive. So we have to respond to that. It’s always allowing yourself to be flexible with different opportunities. I mean, imagine bringing in a famous Spanish architect to New York to build a wonderful, affordable housing project or something like that. It isn’t about how many dollars per foot you spend on a construction; it’s about thoughtfulness. We have the ability and skillset that allows us to also control costs and control some of these variables that can get out of control.

Thorsten Kiefer, HFZ

Thorsten Kiefer is Director of Design and Development for HFZ Capital Group. In this role, he has helped initiate collaborations with architects such as David Chipperfield, BIG, Moshe Safdie, and Isay Weinfeld on projects at various scales in New York and Miami. He talked with AN about his background at OMA, SOM, and SHoP, and what someone in his position can bring to the firm and ultimately the city.

As an architect at OMA in Rotterdam, his job included working in collaboration with Diller Scofidio + Renfro on a master plan for Brooklyn Academy of Music in 2001. This experience at OMA also led to HFZ bringing in OMA to develop an entire empty city block in New York between Tenth and Washington streets along the High Line. However, OMA wasn’t able to continue because of previous contractual commitments, so HFZ turned to another OMA alumni, Bjarke Ingels of BIG, who had worked with Thorsten 15 years ago.

Matt Shaw: You have an interesting background. How did you end up in this role as an experienced architect working directly for a developer?

Thorsten Kiefer:  My time at SHoP was truly formative. At SHoP I worked on competitions in London and New York as well as the redevelopment of the South Street Seaport, initially with General Growth and then followed by Howard Hughes. I formed a number of connections with the development side of the business and after a couple of years at SHoP I began looking for the next career challenge. This opportunity seemed interesting for myself.

What is your role at HFZ?

As Director of Design and Development, I work closely with the marketing team and our executives on the overall conceptual and programmatic framework. The team establishes a list of architects, which we believe would be a great fit for the project. In high-end residential development, the branding aspect of an interior designer or design architect can make a difference in sales.

The global desire for design is higher now than it was 20 years ago. There is money from many countries. Different cultures have different attitudes toward design, and the global market is reacting to that. A lot of global people invest in the city. HFZ tries to offer a high quality product. We do high-end residential, and without design, we wouldn’t get the margins. The value added from the architecture is necessary to get the numbers. 432 Park Avenue by Viñoly has a tremendous location, so people would buy there anyway. But 432 is getting astronomical numbers. Would you get the same price per square foot without the good design? Would the Russians, Chinese, Europeans, and South Americans still choose it?

This position is more common than maybe known in the architectural community. Large developers like Related or Extell have in house design teams. I do believe that this role is valuable. There are very different mindsets in design, construction, and development. The architect is best suited to mediate in between all of them. I also work with zoning lawyers to see if our massing is possible, and also with the construction team to make sure quality is good.

How do you see your role impacting the designs and ultimately the city?

Ziel Feldman, founder and chairman of HFZ as well as Nir Meir, Principal partner at HFZ are very keen on design and quality. Good design simply distinguishes our product within a very competitive market, and we understand this well. I’m also really interested in finding smart solutions to making the city a nice, vibrant place to be.

We are working with David Chipperfield on the last empty lot at Bryant Park and those units will come on the market in the next couple of months. I truly believe that it will not just be a beautiful piece of architecture completing an important urban space in New York, but also a very successful development.

What can this position bring to a company?

I believe an architect is best suited to communicate between all the different groups involved within the development process. We all know that the motivations of construction, marketing, development, or design are not always necessarily aligned, so the role we have with the position is to bring the different mindsets a little closer and hope that the end result is good design.

Do you ever push for different types of projects, like affordable housing?

I certainly have my personal opinion on “affordability” in New York and I do think that affordable housing will be a challenging component in any future residential development in this city.

Brenda Rosen, Common Ground

Common Ground is the largest supportive housing developer and operator in New York. The organization offers formerly homeless people quality environments and services to recover, and also works to develop more traditional affordable housing. Its non-profit status makes its work different from many other developers in the city. Brenda Rosen is the president and CEO, and she gave us some insight on how Common Ground supports its tenants and navigates the non-profit development process.

Matt Shaw: What is the mission of Common Ground?

Brenda Rosen: Supportive housing is affordable housing with onsite services so that’s what is different from your cookie-cutter affordable or market rate operation. There is a percentage of the tenants that come through the lottery process like any other affordable low-income tenant. And the other part of the building is filled with formerly homeless people who oftentimes are suffering from mental illness or substance abuse issues or medical issues and often times all of the above.

So there’s 50 percent or 60 percent of the building that is set aside for people coming from those circumstances and that is why we have onsite support to make sure that all of our tenants—low-income, regular working people, and those who are formerly homeless and who are coming with a lot of challenges and a lot of issues—have the support that they need to do that and to be as successful in housing as anybody else. With the exception of a few projects, one in Rochester and two in Connecticut, we are the property managers for all of our projects so we never leave the project.

We are about to break ground on our first stand-alone conventional affordable project which will be 248 units of affordable housing and that will not have a supportive housing component at all. Because our buildings are tax-credit buildings, your income has to be at 60 percent or less of the Area Median Income. We do the same marketing, advertising, and lottery like any other developer in the city for the affordable housing.

What are some of the challenges of being a non-profit? What does it mean to be a non-profit developer?

What it means is that the financing of the projects can be incredibly complicated compared to for-profits. When we finance a project we have multiple streams of support coming in for capital and for operating. We’ll use bonds, we’ll use tax credits, we’ll use state and city subsidies. And sometimes borough presidents or city council funds will fill a gap that we might have on the capital side. We also have government contracts that are providing operating support so we have regulatory agreements and government contracts, which means we are under intense scrutiny at all times regarding the services that we’re providing and the quality of the housing.

Can you talk more about what it means to be non-profit and specifically do affordable housing?

Fortunately or unfortunately we are not in this business to make a ton of money as we develop. Any non-profit developer that builds housing—for whatever population—will be collecting a developer fee. I think that the thing that really sets a non-profit apart from a for-profit developer is that all of the development fees that we collect, all of the net proceeds of whatever we’re doing, goes right back into the services and the housing that we’re providing. At the end of the day, again, we’re here to have a sound investment for investors that will buy our tax credits and finance a building. But we aren’t here to come out with this monstrous surplus in our budget. I think that because we are a mission-driven organization, our goal is ultimately to develop and operate housing for vulnerable people in New York.

What role does design play in your mission and in your projects?

Design in all of our projects is a top priority for us. We believe that a pride in home and surroundings helps recovering people to gain stability and to really end up succeeding. Ennead [Architects] did Schermerhorn in downtown Brooklyn for us. It has a ton of green elements, is cantilevered over a subway, and it’s incredibly beautiful. We have worked with COOKFOX who designed a building for us in Brownsville and is designing our next two buildings up on Webster Avenue in the Bronx—both a supportive building and an affordable building. The apartments and hallways are really flooded with natural light.

COOKFOX and Robert A.M. Stern are normally known for high-end buildings and yet they come back and work with us again and again, and bring those same design elements into an affordable project. Not many non-profits get to say that Robert A.M. Stern is going to be doing their next project and build in a low-income neighborhood in Brooklyn. We also develop mini studios, where the average apartment is between 225 to 300 square feet. We have to be really thoughtful about the design of the interior of each apartment. I’ve joked that we were doing micro units long before micro units were popular.

What are some of the challenges that you face when choosing sites?

Years ago when we were looking for land, we would site projects in Manhattan and in Brooklyn and in other places. Over the last several years we’ve done new construction in downtown Brooklyn, Brownsville, the South Bronx, and the Lower East Side, in addition to our older Manhattan sites in Midtown. But now primarily the only affordable land for us at this point is in the Bronx.

Common Ground tends to build large. Our smallest building has 72 units and our largest has 640. We prefer to have a building with 200 or more units. So you need a lot of buildable square feet for that, because in addition to the apartments we have a lot of community space in our buildings for our tenants—so we can have computer labs, a multi-purpose room, a gym, outdoor spaces, and offices for the onsite support staff.

Lisa Kim, Two Trees

Two Trees Management Company was founded in 1968 and has developed over 3 billion dollars in real estate. It is most famous for its redevelopment of the industrial neighborhood of Dumbo, Brooklyn. The company has remained committed to fostering artistic and cultural activity in the area through subsidized spaces for arts community tenants, and more broadly, supporting art as an urban issue. Lisa Kim is the Cultural Affairs Director for Two Trees. She formerly served as Private Collection Manager and Director of Exhibitions and Operations at Gagosian Gallery.

Matt Shaw: What initiatives does Two Trees have to support arts and culture?

Lisa Kim: Just having someone in my position is different. I am not a real estate person. My entire background comes from the art world. And so they brought me in to be the liaison to the art community and to think about this notion of organizing the company’s efforts of cultural philanthropy and making space for arts and artists in the neighborhood and how that integrates into our development. For Two Trees in Dumbo, it was really organic from the beginning. They own the majority of this neighborhood, and have seen it change.

It has become expensive for artists to work in Dumbo. The reason for the cultural space subsidy program is to find an organized way to create a level of support for the art community and open up space in our buildings for artists and non-profit groups. We thought an application process was the best way to do it. The space subsidy is rather dramatic. If you are granted a space subsidy here you’re given a lease of up to three years at basically a dollar a foot per month.

It’s tricky because there are a lot of people that certainly do want to bring artists in just to kind of spruce stuff up and then leave them when they don’t need them, but that’s not our case. We have 17 tenants—11 artists and six non-profit groups. With the cultural space subsidy tenants who’ve come in, we want to make sure that they’re also an active part of the community over there.

We want them to know who else is in the neighborhood. We had a little happy hour event last month where we brought in, not just the cultural space subsidy tenants, but our other artists and arts organizations tenants.

Who are some of the tenants?

We have New York’s first feminist cooperative gallery that was founded in 1972 and has been in Dumbo for eight years. On the 2nd floor of 20 Jay Street is a young theater group that goes to empower young women, to teach them how to write, direct, and perform plays about women’s issues. So here you have an A.I.R. gallery, a 40-year-old institution meeting Girl Be Heard, a six-year-institution with very-like minded initiatives talking about what they do.

We’ve been the go-to for arts groups that need a space once they’ve been booted from Tribeca, or Chelsea, or Soho. So we have arts support groups such as the New York Foundation for the Arts and the Marie Walsh Sharpe Faith Program. We also have the sculpture studio for the NY Studio School. Brooklyn Arts Council has their offices here. Arcadia is another arts funding organization that has its office here. We’ve been very supportive, for decades, to St. Ann’s Warehouse and to Smack Mellon. These are all tenants who had free to low rent. So it creates a very serious art community and a cluster in this neighborhood.

Do these cultural initiatives translate to added value for the developers? Or is this sort of a cultural, philanthropic project?

I think it’s cultural and philanthropic. A lot of people want to quantify what happens when you bring culture, but you can’t say when you put in X amount of dollars into arts support that you’re going to affect your bottom line by another number because you can raise property values or rents are higher or various other things. I mean I think it’s really anecdotal. I wish I could give you a metric. If you have cool shit for people to see they’re going to come see it. So who’s doing the cool shit, it’s the arts groups, right?
So how are these initiatives structured financially? Are they part of a separate non-profit? How does it relate to Two Trees?

Well, we’re a two-person part of the staff of Two Trees. The cultural space subsidy program is straight out of Two Trees. You get the same commercial space you would get if you were a market rate tenant. In Dumbo we have three commercial buildings—45 Main, 54 Washington, and 20 Jay Street—and our subsidy tenants are spread throughout all three buildings.

Then, separately, there is the non-profit Walentas Family Foundation with two programs as part of it. One is a neighborhood school program where grants are given for innovative school programs. The other half is the Sharpe-Walentas Studio Program that offers 17 selected artists free studio space for one year in New York.
What does someone in your role bring to the development firm?

Because I’m naive to the world of development I can really be fresh about my approach in thinking about the art first. I go create it first and then there’s the reality check of is it possible to do this? On this site? Is it possible to do it in this budget? Does it make sense for this project or development?” And that’s when you start to put things together.

One of the buildings is a rather significant renovation and that’s the old Galapagos Art Space building at Water and Main streets. Four galleries will occupy that space. We spent the winter and spring months renovating that building from a cavernous, theater event space/bar to four beautiful sixteen-foot-ceiling white box gallery spaces.