Volume 20, Number 28 | The Newspaper of Lower Manhattan | November 23 - 30, 2007

Developer pays $5m into housing fund to greenlight condo tower

By Josh Rogers

Downtowners being squeezed by rents might not have to move to Brooklyn after all. The developers who told them to do that have just agreed to pay $5 million into a Lower Manhattan affordable housing fund in exchange for city approval of their luxury condo and hotel building at 50 West St.

The City Council approved the $600 million project last Thursday, giving Time Equities Inc. the go-ahead to build a 63-story tower next to the Battery Tunnel Garage. The first 14 floors of the building designed by Helmut Jahn will have a 155-room, four star hotel and restaurant, and the other floors will have 290 condos. Time hopes to demolish the green-roofed building at 50 West and begin constructing the tower next year. The building is slated to open in 2010.

The firm has agreed to put $5 million into a special fund to preserve affordable housing south of Houston St. and the city will add nearly $2 million. Time had fought with community leaders and local politicians this year over including affordable housing money in the project. At a meeting to try and persuade Community Board 1 to back the condo plan, Phillip Gesue, Time’s director of acquisition and development, suggested that board members should move to Brooklyn if they no longer could afford Lower Manhattan.

Francis Greenburger, the firm’s chairperson and C.E.O., subsequently disavowed Gesue’s comment in an August interview with Downtown Express, saying in general, affordable housing was desirable, but Greenburger was not willing then to link it to his West St. project.

Councilmember Alan Gerson, who negotiated the agreement with Greenburger and the Bloomberg administration, said the housing fund is the first step to keeping places like Battery Park City’s Gateway Plaza affordable.

“Now we have a new entity that can receive funds from any number of sources that we can use to preserve affordable housing at Gateway -- which was on my mind through this process -- and other places,” Gerson said.

Under a special agreement, Gateway’s owner, the Lefrak Organization, is obligated to stay in rent stabilization until 2009. Gerson said $6.7 million from Time Equities and the city will not be enough to keep Gateway from going market rate, but he’s hopeful the fund will get other contributions.

Even without additional money, the fund will still do a lot more than what could have been hoped for at the beginning of negotiations, Gerson said. Greenburger had made it clear from the outset that his building was too expensive an undertaking to be able to include any below market units, but even if he didn’t take that stance, 20 percent is the traditional amount of affordable apartments set aside in luxury projects. The new fund will preserve many more than 58 apartments – 20 percent of the Time project – Gerson said, although the exact number won’t be clear until the city’s Housing Preservation and Development gets the money, sets up the fund and decides how to spend it.

The city sale of air rights to Time is expected to be finalized soon, after which Time is obligated to pay the first $2.5 million into the housing fund, Gerson said. The second half of the money will be due after the firm gets the certificate of occupancy for the condo.

Gerson said he thinks it’s the first affordable housing fund, financed by a private developer and its important to keep economic diversity Downtown. “Do we want to be in a city that’s economically segregated,” he asked, adding it would be terrible if “the rescue workers who saved Lower Manhattan…could not afford to live in this community.”

City officials and Time executives declined to comment on the agreement for this article. They issued prepared statements in a City Council press release praising the project.

Under a previously announced agreement, Time will buy laptop computers for I.S. 89 in Battery Park City. The middle school gave up its computer lab this year to make more room for P.S. 89 and was hoping to have the laptops in September.

Not having the laptops “ has been a real serious problem this year,” said Michele Herman, the P.T.A.’s secretary. She said teachers planned the curriculum around having the new laptops in their rooms and have had to adjust. Gerson said he’s trying to expedite the computer purchases and hopes the school can get them by next month. Under the agreement, Time will also pay for a full-time staff member to provide computer support for the school.

Gerson said the city was going to put $2 million in the affordable housing fund, but when it looked like a support center for Downtown science teachers was going to be cut, he convinced the city to shift $300,000 to save the program on Henry St.

Greenburger will buy 183,000 square feet of air rights from the city under the deal. In August, he said he expected to pay about $30 million. Gerson said the figure increased a little to about $33 million, but Janel Patterson, a spokesperson for the Economic Development Corp., said the final price has not been decided.

The city will demap Ward St., a narrow and little-known street and Time will convert it into a public plaza to improve pedestrian access in the area now known as Greenwich Street South. The long-term plan is to improve access through the Greenwich area which includes the West Side Highway and the entrance to the Brooklyn-Battery Tunnel. The city hopes to someday add two small parks and more residential buildings to the area just south of the World Trade Center site.

Gerson said the city is starting to move on the Greenwich plans. “I have their commitment that the next step is to fix up the streetscape and these two parks,” he said.

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