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A residential development boomis quickly transforming the landscape of Lower Manhattan.
"Lower Manhattan is one of the fastest-growing residential neighborhoods in New York City," said Thomas Nardacci, spokesman for the Alliance for Downtown New York.
Since 2000, the entire downtown area below Canal Street has added 13,000 units. In the portion of downtown south of Chambers Street alone, there were 44 percent more units in 2004 than in 2000. And projections by the alliance estimate that 22,803 units south of Chambers will house more than 40,000 residents by 2007.
Perhaps no building symbolizes this residential rebirth better than 90 West Street.
It's a miracle that the building constructed in 1907 still stands. The 23-story Cass Gilbert-designed gothic skyscraper sustained major damage from the Sept. 11 terrorist attacks when debris from the World Trade Center, located a block north, tore deep gashes in the northern façade and ignited fires that gutted floors and melted the copper mansard roof.
Four years later, new owners are completing an extensive restoration, converting the landmark office building into 410 rental apartments. It's one of several office conversions, along with ground-up construction, that make up the residential boom.
Favorable financing and tax incentives, an anemic downtown office market, and competitive prices compared to other residential neighborhoods all appear to be factors that have fueled the growth.
A big contributor was the federal government's Liberty Bonds program, created in 2002, which offered tax-exempt financing to spur the rebuilding effort, said Tim Carey, CEO of the Hugh L. Carey Battery Park City Authority, which oversees development in the district bordering the Hudson River at Manhattan's southwestern tip.
"Liberty Bonds are critically important for what happened not only in Battery Park City but also to all of downtown after Sept. 11," he added.
The bonds program set aside $1.6 billion for rental projects south of Canal Street. The allocation has so far helped to finance 13 projects containing 4,779 rental units. Almost $204 million remains to be allocated.
To fund the restoration at 90 West Street, developers combined Liberty Bonds with historic tax credits and the city's 421-g program, which provides tax exemptions for the conversion of office buildings in Lower Manhattan.
"Without the programs, the project wouldn't have been possible," said Peter Levenson, principal at the Kibel Group, one of the project's developers.
Another factor driving the transformation is how more New Yorkers seeking reasonably priced living quarters have discovered downtown.
"We are selling $1 million, one-bedroom [units] in other parts of the city - in Chelsea and the Upper West Side," said Andrew Gerringer, executive vice president at Prudential Douglas Elliman, a New York real estate broker. "You can buy a one-bedroom here for $700,000, which still sounds expensive, but by Manhattan standards it is an affordable apartment today for relatively new construction or a conversion of an existing building."
The lower prices may owe in part to the area's thin retail presence, he added.
"There are not [enough] services right now for people living in the area," Gerringer said.
The scenery may be changing, though. The downtown area is expected to add new services and amenities in the next two years, such as a Whole Foods supermarket, a library, schools, and recreation centers, according to Paul Goldstein of Manhattan's Community Board 1. The city is also investing in park upgrades along the Hudson and East rivers, as well as improving the Fulton Street retail area.
Whatever the factors are, the residential boom is active on various fronts. Some residential offerings include unique living spaces carved out of old, architecturally distinctive office buildings, such as the 37-story Brown Brothers Harriman Building at 63 Wall St. and the former J.P. Morgan Building at 15 Broad St.
Such conversions to residences were primarily limited to lower-grade Class B and C office space prior to Sept. 11. But recent examples include high-grade Class A office buildings, such as 15 Broad Street and 90 West Street. Other current or planned Class A conversions include 100 Maiden Lane, 10 Hanover Square, and soon the upper floors of the historic Woolworth Building at 233 Broadway, also designed by Gilbert.
Office conversions may have peaked, however, because of a tightening of the office market and the state's unveiling of new commercial incentives downtown.
"Certainly in the past year or so the market has tightened on the office side," said Robert Sammons, research director for New York-based Colliers ABR, a commercial real estate consultant. "I think people who own office buildings probably see an upside in them remaining office buildings."
A Tilt Toward New CondominiumsOverall, the downtown residential trend has tilted somewhat to condominiums, in part because of rising land costs based on floor area ratio, said Richard Bassuk, president of the Singer and Bassuk Organization, a debt and equity financier based in New York.
"After Sept. 11, the cost of land was probably $80 to $90 a FAR foot," Bassuk said. "Today it's $300 a FAR foot. At $300, it just does not pay to do rentals."
Among newer condominium projects in the area are a 20-story tower that broke ground in May at 200 Chambers St., which New York-based Jack Resnick & Sons is developing, and the conversion of 130 Fulton St. by Koeppel Cos., which is slated for completion next year.
Battery Park City has two new condominium projects, the 35-story, 238-unit Millennium Tower that broke ground earlier this year and the Sheldrake Organization's 1 River Terrace, a $250 million building with 320 units slated to start next year.
But the downtown is also adding rental buildings and rental-condo combinations. Battery Park City added the Solaire in 2003 and will soon have another rental unit high-rise called the Verdesian.
Outside of the Battery Park district, meanwhile, Rockrose Development recently completed a 51-story, 650-unit rental building at 2 Gold St. And two other ground-up projects - Edward Minskoff's 32-story tower at 270 Greenwich St. and the 75-story Forest City Ratner development adjacent to NYU Downtown Hospital - will have a combination of condominium and rental units.
Something Old, Something New One of the unique residential projects in Lower Manhattan is Historic Front Street. Frank Sciame, Zuberry Development, and the Durst Organization are restoring a landmark block between Beekman Street and Peck Slip. The $47 million, 172,000-sq.-ft. project, which used $38.3 million in Liberty Bonds, involves the renovation of 11 buildings, most dating to the 18th Century, and construction of three buildings to create 96 rental units.
Façades on the structures were cleaned instead of restored. The project team used a grout-injection process to replace weakened mortar, and workers cleaned exposed timbers with ground-up corncob under pressure.
"We kept it a little gritty and a little grimy to keep that authentic feeling of the block," said John Evans, Sciame's vice president of real estate.
The new structures, which have concrete planks and masonry bearing walls, fit in well with the restored structures. Their tile foundations rest atop existing landfill and timber mat.
The team installed 10 new geothermal wells to provide heating and cooling to the block. Interiors feature original exposed timbers, soundproofing in the floor sandwich, and sprinklers recessed in the joist bay.
In contrast, Leviev Boymelgreen Development's new 21-story, 387,000-sq.-ft. building at 88 Leonard St. stands out from its prewar neighbors. Costas Kondylis designed the contemporary structure with an exterior of silver aluminum and glass that highlights a backdrop of black brick. Glass, natural materials, and an indoor garden with a 20-ft. round pool will grace the two-story lobby.
"A glass bridge overlooks the lobby, and we have a two-story glass fireplace," said Rich Ortiz, senior project manager at Tishman Construction, the construction manager on the project.
The 352-unit, $120 million building has a reinforced concrete superstructure. Extension of a two-story, below-grade parking lot under one of the adjacent structures provided an additional challenge, Ortiz said. The team took special care to protect its older neighbors at 93 Worth Street and 80-82 Leonard Street.
"There is a lot of underpinning, bracketing, and shoring up of the existing buildings," he added. "We preserved it and kept it intact."
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