Eye On Real Estate
By Lore Croghan
Brooklyn Daily Eagle
Pay attention. This is actual news.
The developers of City Point are increasing the number of affordable apartments at the mixed-use mega-development in Downtown Brooklyn.
Because of a deal the builders just finalized with the city, 80% of the units in City Point's Tower 1 rental-apartment building will be earmarked for low- and middle-income residents.
That's 200 of the 250 apartments in the 23-floor tower, whose construction is nearing completion.
Originally, 50% of the apartments — 125 of them — were going to be affordable units. But at the de Blasio Administration's request, the developers switched 75 market-rate apartments to affordable units.
“The city came to us and asked us to do this,” Aron Gooblar, a vice president at City Point co-developer Washington Square Partners, told Eye on Real Estate during a recent hard-hat tour.
“It was a very amicable discussion,” he said when we asked if city officials pressured the developers to increase the number of affordable units since the land is city-owned.
By the way, Tower 1 — which the developers refer to as 7 DeKalb Ave. — was previously known as 70 Fleet St.
Washington Square Partners and Acadia Realty Trust — which jointly ground-leased the entire City Point site from the City of New York — co-own Tower 1 with developer BFC Partners.
“We found a way to work with HDC and EDC,” Gooblar said. “Our lender Wells Fargo agreed to change their underwriting for the project.”
The city Housing Development Corp. (HDC) issued the bonds for the project. The city Economic Development Corp. (EDC) administers the project for the city.
The process of putting the deal together started at the end of last year and was just concluded.
The deal to increase the number of affordable units was made by amending Washington Square Partners' and Acadia Realty Trust's ground lease.
“We see it as part of building a great project for Brooklyn in this neighborhood,” Gooblar said.
Usually in New York City, an “80/20 building” rents 80% of its apartments at market rates and uses 20% of its units as affordable housing. Gooblar pointed out that 7 DeKalb Ave. flips that formula upside down.
Affordable housing is a top priority for Mayor Bill de Blasio.
In 2014, he announced a 10-year citywide plan whose goal is the construction of 80,000 new affordable apartments for low- to middle-income residents and the preservation of 120,000 existing affordable units.
No 'Poor Door' for Tower 1
City Point, located on Fulton Mall, is a 1.9 million-square-foot development. Its retail component was featured last fall in Eye on Real Estate.
The streets that border City Point are DeKalb Avenue, Gold Street, Willoughby Street, Flatbush Avenue Extension and Fleet Street. Albee Square Mall formerly stood on the site.
In Tower 1, apartments for low- and middle-income residents will be spread throughout the building, including the highest floors, Gooblar said.
There won't be a “poor door,” he told us. A poor door, of course, is a separate entrance for the residents of affordable units in a mixed-income property, a controversial feature found in some Manhattan developments.
At 7 DeKalb, 20% of the units are for renters who earn 40% of the area median income (AMI), meaning low-income New Yorkers. And 60% of the units are for renters who earn 130% of AMI, meaning middle-income New Yorkers.
In New York City in 2015, 40% of AMI means an annual income ranging from $24,200 for an individual to $34,520 for a family of four, HDC's website indicates. The site says this year in New York City, 130% of AMI ranges from $78,650 for an individual to $112,190 for a family of four.
Tower 1's other 50 apartments will, of course, be market-rate rentals.
The application process for people who want to rent the affordable apartments is expected to start this summer, Gooblar said.
There are studios and one- and two-bedroom apartments in the tower.
The developers will hire a brokerage firm to handle the leasing of the full-price apartments, which are expected to hit the market in late summer.
The lower floors of the building should be ready for occupancy this fall. By the end of this year, all the apartments should be ready for occupancy.
Other City Point Apartment Towers
There will be two other residential buildings at City Point.
Tower 2, whose construction is expected to be completed this year, is a 430-unit, market-rate rental property that belongs to the Brodsky Organization. City Tower is its name.
In previous stories, we referred to it as 336 Flatbush Ave. Extension.
On June 3, Washington Square Partners and Acadia Realty Trust announced that they sold the development rights for City Point's Phase 3 to Extell Development Co. for $115.5 million.
The construction of Phase 3 is expected to be completed in 2020, the announcement noted. It will have 600,000 square feet of residential space atop a 65,000-square-foot commercial base.
The address of that portion of City Point is 138 Willoughby St.
Extell's tower could be 60 stories tall and will probably be a rental building rather than a condo property, The New York Times reported. There was no word on whether Extell might include affordable units.
A Zinc Façade and Superb Views
A final word about 7 DeKalb Ave.
It has a zinc façade, which is a modern touch. (We approve of metal façades. The landmarked Socony-Mobil Building at 150 E. 42nd St. in midtown, whose exterior is covered with thousands of embossed stainless-steel panels, is a favorite of ours.)
During our hard-hat tour of Tower 1, we rode the construction elevator to the top of the building.
The wonderful midtown vistas we saw will eventually be blocked by Extell's property — but no matter.
Eye-popping views will remain of New York Harbor, the Statue of Liberty, the Verrazano-Narrows Bridge and a vast expanse of Brooklyn all the way to Coney Island. Nearby buildings that looked great include the Williamsburgh Savings Bank's clock tower and Barclays Center.
Check out the stunning shots of these vistas taken by our photographer colleague Rob Abruzzese— which can be found scattered throughout this article— who joined us on the hard-hat tour.
There will be central air-conditioning at 7 DeKalb — which isn't the norm in buildings with affordable apartments, Gooblar said — and amenities for tenants such as a gym and a 10,000-square-foot terrace.
“The level of design here is unprecedented for a mixed-income building,” he explained.
It's a girder-slab building, which means it has a structural steel frame with precast concrete slab floors.