Big Comeback in the Bottom of the Ninth for the Bronx

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The New York Sun

“Well, the Bronx really is making a big comeback in the bottom of the ninth,” the chairman of the Phipps Community Development Group, Adam Weinstein, said. Phipps Houses is one of the nation’s largest not-for-profit developers, owners, and managers of affordable housing. “The story today in the Bronx is not as much the affordable housing story as it is the beginnings of a more mixed income economy, and one that will better support retail uses,” Mr. Weinstein said.

Monday’s groundbreaking for Gateway Center at Bronx Terminal Market, followed by Wednesday’s groundbreaking for the new Yankee Stadium project, marks a new chapter in the rejuvenation of the South Bronx and the commencement of redevelopment projects on a scale not seen in the Bronx in recent times. Together, these projects should form the cornerstone of economic opportunity, the creation of new jobs, and a great source of pride for a borough that has had difficulty attracting new projects and capital for investment.

Gateway Center at the Bronx Terminal Market, a one-million-square-foot retail center in the South Bronx, is a development of the Related Companies. The $500 million project — one of the largest private investments ever in the Bronx — will provide new public access to the Harlem River waterfront.

When it opens to the public in fall 2009, the new Gateway Center will house a mix of national and local retailers and restaurants. The center’s tenants will include Target, BJ’s Wholesale Club, Home Depot, Best Buy, and Bed, Bath & Beyond, as well as community retailers. As part of the project, Related will restore the Prow Building, at the corner of East 149th Street and River Avenue, in an effort to preserve the history of the old Terminal Market.

In February, the Related Companies won its bid to build the Gateway Center at the 31-acre Old Bronx Terminal Market, which opened in 1935. The Related Companies purchased out the 99-year lease that the Bronx’s Buntzman family obtained on the facility in 1972. Related agreed to pay the Buntzmans more than $40 million for the lease.

Last Wednesday, dignitaries joined together for the ceremonial groundbreaking for the new Yankee Stadium. The new Yankee Stadium will be developed just north of the existing facility at Macombs Dam Park and a portion of John Mullaly Park, and will be completed in time for the opening of the 2009 baseball season. Funding for the $800 million in construction costs is being provided fully by the Yankees, who will also be responsible for operating and maintaining the new facility.

Under the agreement with the city, the Yankees will lease the site for the new stadium for an initial term of 40 years and will be responsible for paying the entire cost of construction including any cost overruns. The city is contributing $160 million to replace parkland and make necessary infrastructure improvements, and the state is contributing $70 million for the construction of new parking facilities and $4.7 million to a capital reserve fund for the new stadium.

The Yankees will be responsible for any capital replacement costs in excess of this amount over the next 30 years. In addition, last month New York City’s Industrial Development Agency (IDA) approved the issuance of about $920 million in tax-exempt bonds and $25 million in taxable bonds, both to be repaid by the Yankees. The proceeds of the bond sale will be used to build the stadium.

In March, the Related Companies broke ground, for $56.7 million, on the Hub Retail and Office Center on a site located between 153rd and 156th streets on Third Avenue in the South Bronx. The mixed-use facility is being built on vacant, formerly city-owned property at the northern end of the Hub commercial district that will contain retail space and the Department of Finance’s Bronx Business Center.

The developer will also renovate a former municipal parking garage. Related also plans to construct a two-story, 170,000-square-foot retail and office building and rehabilitate the adjacent parking garage with retail space on the ground floor. The four-story garage, which has been vacant for many years, will be completely renovated with space for 265 cars and new systems to allow more efficient entry and exit. The Hub Retail and Office Center will be home to retailers including Staples, Rite Aid, and Forman Mills, an apparel retailer. An additional 1,500 square feet of office space will be made available for use by the local community board.

Related purchased the property from the city as a result of request for proposals issued by Economic Development Corporation (EDC) for $1 million. When complete, the Department of Finance will relocate an additional 225 employees to the new facility from other locations in the Bronx. The project is expected to be finished in 2008.

In March 2005, Mayor Bloomberg announced the Hunts Point Vision Plan and an initial investment of $27 million to implement and promote a competitive business environment on the Hunts Point Peninsula in the South Bronx. The city has already invested $85 million for the Fulton Fish Market and $25 million for the Produce Market.

The goals of the Hunts Point Vision Plan include developing new waterfront parks, improving traffic safety, upgrading street lighting, repaving streets, and improving the rail freight lines serving Hunts Point. Additionally, the plan will better link workers to anticipated new jobs through collaboration with the Metropolitan Transportation Authority to provide new bus service to the Hunts Point area.

The Hunts Point Peninsula has an area of roughly 690 acres, with almost half made up of the 329-acre Food Distribution Center. Much of the New York region is fed by the Food Distribution Center, which has more than 115 wholesalers that generate revenue of more than $3 billion a year.

Boricua College is the first post-secondary educational institution in America specifically designed to meet the educational needs of Puerto Ricans and other Spanish speaking people. In the first quarter of 2007, Atlantic Development Group and the college will be developing a one million-square-foot mixed-use development on Third Avenue between 161st and 163rd streets. The centerpiece of the project is a 130,000-square-foot college, which will be surrounded by 700 mixed income housing, 50,000 square feet of retail and 30,000 square feet of community facility space. “This project completes the development of 161st Street commercial corridor of the Bronx,” the co-founder and president of Atlantic Development Group, Peter Fine, said. “We are pleased to be part of the rebirth of Bronx over the past ten years, building more than four million square feet of residential and retail space.”

Mr. Weinstein is more than optimistic. “The time is ripe for the next wave in the Bronx, which will be more mixed income, at greater density, with more robust retail, and possible transit oriented development, taking advantage of the Bronx’s excellent transit access” he said. “Phipps has more than 1,000 residential units in the pipeline which will combine all of these attributes, while still reserving a substantial number of units for lower income households.”

“We are a big believer in the growth of the outer boroughs and of the Bronx in particular,” a partner at Apollo Real Estate Advisors LP, James Simmons, said. Because of some very positive and dynamic improvements in infrastructure and a renewed emphasis on providing much needed services to the residents of the Bronx, Apollo has been an active investor in the borough over the past 24 months. This commitment is demonstrated by the December 2005 purchase of the Lafayette Morrison and Lafayette Boynton Housing Complexes, which are poised to become affordable cooperatives. The purchase represents 1,862 of the more than 3,000 units that Apollo currently owns throughout the borough.

There are those who are happy the Bronx is finally getting its due. “The Bronx is attractive due to the quality of its housing stock, the development potential of its waterfront, and its growing population. It is a close-in affordable alternative to other boroughs. The borough president and mayor have done a wonderful job of attracting private capital to a previously neglected part of New York City. We aim to be the foremost provider of quality housing throughout the borough,” said James Simmons, a partner at Apollo.

The first hotel in the Bronx, overlooking Yankee Stadium, was the Concourse Plaza Hotel at East 161st Street and Grand Concourse. Dedicated in October 1923, it was the home of dignitaries, businessmen, and baseball and football players. In 1974, the city bought the building and in October 1982 it was reopened as housing for the elderly.When the new Yankee stadium opens in 2009, the Bronx may see the development of a 250-room hotel and convention center. Yet even today, Sam Chang, principal of McSam Hotel, is planning to construct a five-story, 80-room Comfort Inn Motel at 3070 Webster Ave. between 202nd an 203rd streets. McSam purchased the former 5,500-square-foot warehouse last year for $550,000.

Next month, the city plans to issue a request for propsosal for the renovation of the land called Kingsbridge Armory. In May, Deputy Mayor Dan Doctoroff said the two top priorities for the site were school space and recreation facilities.The Armory is located on five acres on four city blocks, located at the corner of Kingsbridge Road and Jerome Avenue. One interested developer has proposed to the community board a project which includes a movie theater, a mixture of large and small retail stores (Lowe’s and Kohl’s), three public schools, a recruting station for the National Guard, community space and possibly a branch of the Armory and a bookstore.

“Riverdale is one of the best kept secrets in the boroughs,” the principal, of Arc Development, Joseph Korff, said. “Riverdale has had a burst of new development largely stimulated by the change in zoning which restricted height and by the success of new developments.”

This fall, the first residents will move into the tallest building in Riverdale, ARC Development LLC’s Solaria, a 20-story, 65-unit condominium tower with apartments ranging from two to five bedrooms. “Riverdale provides the opportunity to own a residence in an established neighborhood,” the president of the City Investment Fund, Thomas Lydon Jr.,said.

In the fall the sales office will open for a new 150,000-square-foot condominium tower being developed by the City Investment Fund and L & M Equities. Last year the joint venture teamed up to acquire a development site located at 3260 Henry Hudson Parkway from the Hebrew Home for the Aged. In the South Bronx, L & M Equities and Procida Realty & Construction are building the nine-story, 60-condominium unit, the Orion. A total of 46 units are offered by lottery coordinated by HPD for purchasers earning between $58,320 and $94,770.

The outlook for growth and development is bright for the home of the Yankees — the world famous Bronx.

Mr. Stoler is a television broadcaster and senior vice president at a title insurance company. He can be reached at mstoler@newyorkrealestatetv.com


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