$172M sale of prime East River site closes
One of New York City’s busiest developers has officially added another high-profile development project to his growing portfolio. Last week, 33-year-old Michael Stern, managing partner of JDS Development Group, closed on the acquisition of a two-acre parcel that was owned by Sheldon Solow on the former Con Edison site along the East River in Kips Bay. JDS paid Solow Building Company $172 million.
„What’s so appealing about this is that the property has everything you’d want in New York,“ Mr. Stern said. „It’s got river views, city skyline views and sort-of open-space park views.“
JDS is developing the parcel on First Avenue between East 35th and 36th streets, along with minority partners Largo Investments. The development team will stick largely to plans Mr. Solow had won city approval for back in 2008, when the entire 9.2-acre property was rezoned for residential use. Mr. Solow bought the property from Con Ed in 2005 for $630 million.
JDS will build two towers— one 37 stories and the other 47 stories—with total of about 800 apartments. Most of those will be rentals, but Mr. Stern said he might add some condo units depending on market conditions when the project is finished, tentatively in 2016.
He said he was currently interviewing architects to design the towers, and expects to pick one in coming weeks. Construction is expected to begin this summer. The site is already vacant.
There will also be more than an acre of open space at the base of the towers, and Mr. Stern said he is working with the Department of City Planning to ensure a strong connection to the waterfront. The FDR Drive stands between the property and the river, but Mr. Stern said he and the city are working on a solution to this problem, which could result in a pedestrian bridge or deck of some kind.
„There really hasn’t been a large-scale, great building like this built in the neighborhood in a generation,“ Mr. Stern said.
That could change, though, not only if and when Mr. Solow kicks off work on the seven acres he still controls further north, but also as other marquee projects get underway in the area, like the Zecekendorf’s 50 United Nation’s Plaza, just a few blocks to the north.
Mr. Stern said that with more than a million square feet in his project, he is not waiting around for the neighborhood to grow up around him. „We are self-contained and ready to go,“ he said. The entire JDS project is expected to cost $600 million and is fully financed, according to Mr. Stern.
„To have the opportunity to build to this scale in a prime Midtown location— it’s one of the largest, if not the largest piece of prime real estate in Midtown— is pretty exciting,“ Mr. Stern said.
Correction: JDS Development Group, along with partner Largo Investments, is developing the parcel on First Avenue between East 35th and 36th streets. JDS Development Group’s name and the firm’s partners were misstated in an earlier version of this article published Feb. 13, 2013.
By Matt Chaban, Crain’s
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