Inside Look

An in-depth look at some of the region's biggest owner/developers -- both public and private

While the construction industry continues to thrive in much of the tri-state region, some of the area's biggest and busiest owners, from both the public and private sectors, gave New York Construction a long look at their roster of projects and talked to us about their plans and strategy for the future.

Cappelli Enterprises and the Trump Organization

Cappelli Enterprises, based in Valhalla, N.Y., has teamed up with New York's Trump Organization and has projects totaling $100s of million.

By itself, Cappelli properties in New York, New Jersey, Connecticut, and Maryland. It established itself as a regional leader in Westchester with the completion of City Center in White Plains, a $320 million, 1.1-million-sq-ft mixed-use complex that includes two 35-story residential towers, retail, and entertainment. Its total portfolio exceeds $2 billion.

Cappelli is currently nearing completion on an additional 950,000 sq ft of mixed-use space in White Plains. The $600 million Renaissance Square occupies an entire block between Main St. and Hamilton Ave. Designed by Costas Kondylis and Partners of New York, the complex's two towers will include 185 condos ranging from 1,100 to 5,000 sq ft, a 118-room Rizt-Carlton Hotel with rooftop swimming pool, 50,000 sq ft of office space, retail, and dining, including a rooftop restaurant on the 42nd floor boasting Manhattan skyline views. The first tower, which includes the hotel, was completed in December, and the second tower is scheduled for occupancy this summer. In addition, a 4,700-sq-ft three-story building accessible to the public will open this spring. The project also includes infrastructure work: a new five-lane road will link Main St. and Hamilton Ave, ensuring easy access both to the I-95 corridor and the train station.

Together with the Trump Organization, Cappelli has already developed the 35-story Trump Tower at City Center in White Plains, as well as the 40-story Trump Plaza in New Rochelle, completed last fall as part of a $750 million downtown redevelopment plan that includes the site and Le Count Square. Cappelli changed pace on the Plaza in light of diminishing credit markets around the country, and offered the last remaining 30 % of the units, which range in price from $500,000 to $1.7 million, as "rent-to-buy" options.

In addition, the team is nearing completion on Trump Park Residences in Yorktown, an $80 million luxury home community designed by Sullivan Architects of White Plains, New York. The project will feature 141 homes ranging from 1,100 to 2,000 sq ft, with 9- or 11-ft ceilings. The first phase of the project was completed last year, with 50 % of the homes sold for between $400,000 and $950,000. The second phase is scheduled for occupancy this spring.

Toll Brothers City Living, New York

Toll Brothers of Horsham, Pa., a common name in single-family home construction across 21 states, has only entered the tri-state high-rise scene in 2004, with the opening of its City Living division in New York. The firm's strategy includes partnerships with local developers and a knack for building in the tri-state area's trendiest neighorhoods.

By 2006, Toll Brothers has topped out the 21-story 110 Third Ave. in Manhattan's East Village. Last year, it completed the 29-story One Northside Piers on the Williamsburg/Greenpoint waterfront. The 180-unit tower, designed by famed New York-based architects FXFOWLE, was a joint project with L&M Equity of Larchmont, N.Y. And in the Long Island City section of Queens, the firmis nearing completion at 5th Street Lofts, a seven-story condo building featuring loft-style apartments starting in the mid-$400,000s. Occupancy is slate for this summer to fall.

In New Jersey, Toll's Jersey City-Hoboken division of City Living is at work on several projects. In 2006, Toll Brothers broke ground in Hoboken on Maxwell Place on the Hudson, a joint venture with Pinnacle Downtown of Millburn, N.J. The 1-million-sq-ft mixed-used project on the former 24-cre site of a Maxwell House coffee plant is a four-block development that includes 800 condos, ranging from $500,000 to over $2 million, and 200,000 sq ft of commercial and retail space. In addition, the project touts the restoration of what many claim to be the site of the county's first baseball game - Elysian Fields. Bovis Lend Lease is the construction manager on the project, which includes several 12-story buildings and five- to six-story townhouses. Dean Marchetto Associates of Hoboken and New York's Perkins Eastman are the architects on the project. The first 2 buildings are slated for completion this fall, and the overall project in 2010.

Also in Hoboken, Toll Brothers is developing the 500 units at Hudson Tea, a 12-story warehouse conversion of a former Lipton Tea Company warehouse. The units, ranging from 735 to 1,640 ft and starting in the mid $400,000s, all have 13-ft ceilings and large loft-style windows. The first phase is scheduled for completion next Winter, with thee additional buildings planned.

Toll's strategy has kept them in up-and-coming enclaves like Williamsburg and Hoboken, and the company intends to keep to it, according to David Von Spreckelsen, vice president of Toll Brothers City Living - New York City Division.

"Toll Brothers is committed to the tri-state area. We continue to analyze and research new and existing locations and neighborhoods as there are currently a lot of great opportunities in the tri-state area. We look forward to pursuing those deals that we feel will be successful and add to our growth in great, prosperous locations that offer our homeowners a unique and luxurious living experience."

Swig Equities LLC, New York

Swig Equities builds, acquires and manages both commercial and residential real estate, with $3 billion worth of properties primarily in New York and San Francisco. In Manhattan, Swig's office holdings include the 900,000-sq-ft 110 William St., the 320,000-sq-ft 5 Hanover Square, and the 350,000-sq-ft 44 Wall St., among others. Its residential properties include 201 W 92nd St. and 112 residential units within Gracie Townhouse at 401 E 89th St., among others.

During the last five years, Swig has expanded its portfolio significantly, both in New York and on the West Coast, and expanded personnel to meet the growth.

"We built up our infrastructure in office technologies and human resources," says Kent Swig, president of the firm. The 120-person firm now includes a staff of seven in-house architects, for example, hired from firms such as New York's SOM and Beyer Blinder Belle, as well as an in-house construction management team. "We hire third party pros to the the work, but we have an almost duplicate staff inside."

In April, Swig will complete the first two phases of the mammoth conversion of Sheffield57, a 900,000-sq-ft, 58-story tower adjacent to Manhattan's Hearst Tower to the east. The building's original 845 units were converted to 570 units, requiring a complete gut rehab, keeping only the original columns and electrical and plumbing risers. The firm brought in New York-based Cetra/Ruddy Architects to combine the units, which now range from 600 o 1,700 sq ft, and add luxurious touches such as Travertine flooring, etched-glass cabinetry, and marble bathroom floors, as well as completely redo the lobby and add a drive-through connecting 57th and 58th Sts. Amenities include a 372-car garage, an open-air pool, and a full service health club and spa. The first 35 floors were completed in December, with the remaining units ready for occupancy by April. This year, the firm will also convert the top two floors into a residents' area, including a private restaurant, screening room, children's room, and residents' lounge offering evening cocktails. With the purchase price and the relocation of existing tenants prior to the conversion, Swig spent $680 million on the project. According to Kent Swig, this is the largest conversion in New York City history.

Also this spring, Swig will complete the conversion of 25 Broad St. in Manhattan's Financial District. The 21-story, 565,000-sq-ft office tower designed by Clinton & Russel was originally completed in 1902 and became the largest office building in the nation. It was later converted to 346 residential units, which Swig is keeping as is. Described as a pre-pre-war building, its apartments feature ceilings 10 to 14 ft high. Cetra/Ruddy Architects were again brought on to redesign the interiors with new hardwood floors, new bathrooms lined with marble, and new kitchens. The $400 million project, which includes purchase price, required extensive approvals from the Department of Buildings and the New York City Landmarks Commission, as well as the relocation of existing tenants.

Kent Swig believes the current credit crunch will weed out some of the firm's less experienced competition, while Swig Equities is poised to profit from the continued demand for office and residential space.

"For those that have the infrastructure and the ability to implement projects, [2008] will be a great time," he says.

Antares Investment Partners

Founded in 1996 in Greenwich, Conn., Antares Investment Partners now has a portfolio of $4.5 billion, primarily in commercial real estate in Connecticut with a growing stress on financial services firms flocking to the state.

"We understand right down to the last detail what the high-end financial services tenants need in their office space," says Joseph Beninati, partner and co-founder. "That's our beat."

Most recently, Antares acquired the 150,000-sq-ft U.S. Tobacco Co. headquarters site at 100 W. Putnam Ave. in Greenwich. Antares is doing a $30 million gut rehab and adding a new lobby to link a round building and a square building. The project is scheduled for completion in June, and Antares has already preleased 70 % of the space at the "highest rent ever achieved in the U.S. for any type of office building save some office space in Manhattan," according to Beninati.

Last year, the firm acquired a Manger Electric site in Stamford, and has hired New York's David Childs of SOM Architects to design 700,000 sq ft of office space for financial use. Gateway 1 and Gateway 2, as the towers are called, are expected to be up within 24 months.

Antares's largest project, and indeed one of the largest developments in the nation, is the $3 billion Harbor Point redevelopment in Stamford. Harbor Point includes 1.3 million sq ft of office space already up, and 7.3 million sq ft of new construction slated to break ground in the second half of the year and go on for five to seven years. The mixed-use project, spread over 100 acres of land that includes several miles of waterfront, incorporates hotels, office, rental, residential, retail, and a yacht club, with several buildings in the 30-story range. The infrastructure work on the project, which includes road, train, and utilities work, is estimated in the $100s of millions.

Antares seems to have withered the debt crunch.

"The biggest challenge ending in 2007 has been operating in a capital markets environment where the debt providers are in such a state of panic that they're losing sight of the strong GDP growth, strong job growth, low inflation and low interest rates that the national and global economy is currently enjoying," says Beninati. "Our longest-standing and best lenders have come to us and said - it's during the most tumultuous times that we concentrate on serving our best and longest-standing customers."

To take advantage of the current capital markets, Antares is raising money in the Middle and Far East for investment in the tri-state area. Additionally, the firm has launched its first private equity global investment fund with Goldman Sachs. "Eventually, [we] will be doing all of our investment with Antares Private Equity Fund," adds Beninati

Douglaston Development

The firm has been developing New York rental and condominium properties for 25 years, with its Levine Builders arm managing construction on all of its projects.

Last year, Douglaston completed the $200 million 325 Fifth Ave., a 50-story, 250-unit tower in Manhattan, and broke ground on the signature Zinc Building in Lower Manhattan, a 21-unit glass-encased building designed by New York's Greenberg Farrow Architects.

Douglaston's development philosophy is to find opportunity where other firms find adversity. For example, 325 5th Ave. went up on a site that was undervalued, according to Jeffrey Levine, principal of the firm, while Douglaston saw the opportunity to build housing just minutes away from the mid-town office district.

In the last few years in particular, Douglaston Development has incorporated affordable housing and community facilities components into its projects under several of the city's programs. Hampton Court at 102nd St. and 1st Ave. in Manhattan, co-developed with Glennwood Management of New York, was funded through the New York State Housing FInancing Agency's 80/20 program, which provides low-interest and tax-exempt bond financing. The 225,000-sq-ft building, completed in 2004, includes 55,000 sq ft of community facilities and 229 luxury apartments.

"We have been very active in these past six years since 9/11," says Levine. "New York continues to be globally attractive and nationally attractive. In the final analysis, the uncertainty that followed 9/11 was a wonderful opportunity for anyone who could see the advantages."

More recently, the firm broke ground on the 1-million-sq-ft Edge in Brooklyn's Williamsburg district. Douglaston purchased the site before the rezoning of Williamsburg/Greenpoint paved the way for high-rise residential construction. After the rezoning, it was able to capitalize on the incentives the city offered developers. The project will feature 1,500 units, of which 375 are slated at moderate-income families, as well as 70,000 sq ft of retail along Kent Ave.

"We're taking what was in essence a wasteland," explains Levine, about the 100-year old site that housed a recycling center prior to the construction. "In addition, by building new we can bring new amenities - be it a large gourmet grocer, or a large bank."

In Manhattan, Douglaston has secured financing for a 35-story, 400-unit rental tower under the city's 80/20 program. The site at 30th St. and 11th Ave. is poised to benefit from the 7 line subway extension, and is adjacent to the High Line elevated park now in construction.

MTA

The Metropolitan Transportation Authority has a workforce of 66,000 employees and provides 2.4 billion annual trips along its network of subways, buses, and railroads. Its 2007 operating budget alone was $10.36 billion. In December, the agency once again raised fare prices, this time only on unlimited-and multiple-ride cards.

The past three years have been a time of change for the MTA. Elliot Sander came in as the executive director and chief executive officer last year. The MTA has been impacted by the same market conditions affecting the rest of the construction industry. Higher materials costs and a shortage of bidders led to the agency making cost containment measures in regard to specifications, acceptance criteria, and track access, in order to make its projects more attractive to bidders, according to Cosema Crawford, senior vice president, Capital Program Management, MTA NYC Transit. In the near future, Crawford believes better funding, overhauling contracts, and embracing of Building Information Modeling systems will help the agency maintain its pace and meet the demands of some of the largest construction projects the city has seen in decades.

The Second Avenue Subway line, which started construction last year, is a brand new line that will run from 125 St in Manhattan to the Financial District under Second Ave. The first $3.8 billion phase, with $1.3 billion of federal funding in place as of November, is expected to be completed in 40 months. Phase I will include a tunnel from 105th St to 63rd St., and is expected to carry over 200,000 weekday riders.

In November, MTA awarded a $1.145 billion contract for the $2.1 billion extension of the No. 7 line to the far west side of Manhattan. A consortium of J.F. Shea Construction, Skanska USA Northeast, and Schiavone Construction will work on the first phase of construction.

The MTA also continues work on the $6.3 billion East Side Access project, started in 2001 and slated for completion in 2013, which will bring Long Island Railroad trains into Manhattan’s Grand Central Terminal

Smaller projects, meanwhile, are in place to enhance service on the rest of the network. In November, the agency expects to award the $200 million rehabilitation along the Culver Line in Brooklyn, the four-track viaduct running up to 90 ft high between the Carroll St. Station and the 4th Ave.-9th St. Station along the F and G subway lines. Originally opened in 1933, it now serves the second busiest line in Brooklyn, ferrying 90,000 weekday passengers. The structure is wrapped in certain sections to prevent further deterioration to the concrete and steel, already failing at waterproofing. Some of the stations have gaping holes in the canopy. The work will include reconfigurations of the 4th Ave. and Church Ave. interlockings, modernization of the 70-year old signals, rehabilitation and repairs at the Smith/9th St. and the 4th Ave./9th St. stations, and tunnel lighting rehabilitation. To accomplish the work, the MTA will continuously close two out of the four tracks, but once the work is completed it will allow for F Express service. The project has a 45-month construction schedule.

Connecticut Department of Public Works

DPW is in charge of design, construction, and maintenance of facilities for client Connecticut state agencies ranging from educational to judicial. The agency's new commissioner Raeanne V. Curtis was appointed in September to continue a new emphasis on improving bidding and contractor selection, which includes an expanded legal staff and a streamlined website to navigate the design and construction process. The agency is now working with the Department of Construction Management at Central Connecticut State University for its staff training.

This month, the agency will dedicate the new $34 million Tunxis Community College Library and Classroom Building in Farmington, designed by DuBose Associates of Hartford. The project includes a 30,000-sq-ft library and a 65,000-sq-ft classroom building, constructed on former site of Fisher Hall. M.A. Angeliades of Trumbull served as the general contractor on the project, which broke ground spring 2006.

In August, DPW will complete the $74 million renovation and expansion of the Prince Technical High School in Hartford.

In addition, DPW oversaw the construction of the 40,000-sq-ft Child and Family Resource Development Center at Eastern Connecticut State University in Willimantic, a $12 million new school for childhood educators. Konover Construction Corp. of Farmington was the general contractor on the project, completed in 2006. Last year, Konover also completed new three-story, 49,000-sq-ft student center for Western Connecticut State University Westside Campus in Danbury, a $17.8 million project DPW started in 2005.

Last year, DPW has seen a slow down in obtaining bond funding to move projects forward, according to Patrick Nolan, the agency's spokesman, due to competing expenditure demands on the state budget. To compensate, DPW has had to refined its priorities and focus on relationships with its partner agencies and clients.

According to Nolan, DPW will feel a big impact from Public Act 07-4, Sec. 73, which will permit juvenile courts to take to trial most 16 and 17-year-old offenders. In preparation for the act's 2010 enactment, DPW is planning modifications and new construction of judicial facilities to meet juvenile needs.

Meanwhile, DPW will break ground next year on a $198 million consolidation of the Gateway Community College on Church Street in downtown New Haven. New York's Perkins + Will are the architects on the project, which includes 360,000 sq ft of new space and is slated to become the agency's first LEED Gold-certified project. Gilbane of Glastonbury, Conn., is the construction administrator, with a contractor soon to be named. Also starting construction next year is the $88.3 million,m 110,000-sq-ft ew State of Connecticut Public Health Laboratory in Rocky Hill.

Connecticut Department of Transportation

The agency is a "truly a multi-modal DOT," says Deputy Commissioner Jim Boice, as it oversees the state's highway and bridge network, bus and rail service, airports, marine ports, and ferries, in addition to several transit-related programs.

The agency "continues to rebound after a period of lack of funding and manpower," says Boice, a "spell" lasting from 2000 to 2004. Since Connecticut Governor Jodi Rell has taken over, the agency received over $2 billion in funding in 2005, and has found it difficult to staff its projects due to a nationwide shortage of civil engineers. A new internal commission has issued a report late last year aimed at improving operations and efficiency.

In 2006, ConnDOT completed an 8-year, $575 million modernization project of I-95 in Bridgeport. Due for completion later this year is an $84 million, 30-track-mile renovation and three-bridge replacement along the New Milford-Stamford rail line.

This year, the agency will bid several contracts for the estimated $1.2 billion Q Bridge Program, which includes a 10-lane new Pearl Harbor Memorial (Q) bridge over the Quinnipiac River in New Haven, operational and capacity improvements on 7.2 miles of I-95 between New Haven and Branford, and a new commuter rail station in New Haven.

Also bidding out this year in New Haven is a $500 million new rail yard, scheduled for completion in 2010, and a new maintenance facility for 200 buses. In the pipeline is a new dedicated bus line connecting New Britain to Hartford, as well as more improvements along the I-95.

In design is the $500 million 9.4-mile Busway project, scheduled to start in 2010 and complete in three years. The project will add 10 to 11 dedicated bus stations along an abandoned rail road between New Britain and Newington Junction and along an Amtrak line to Hartford, as well as rehabilitation and new construction of 16 bridges. The buses will be able to bypass traffic on local streets and the I-84.

"We're looking at tying land use and transportation together," says Boice, "and we like development along the shoreline. We have the I-95 and the rail road, and in the Connecticut river valley we have I-91 and the rail road."

Boice adds that a key to DOT's long term strategy is preservation of green space in the region.

New Jersey Transit

New Jersey Transit is the largest statewide public transportation provider in the country, with a ridership estimated at 881,700 weekday trips project for 2008.

Thanks to the replenishment of the Transportation Trust Fund, according to Richard Sarles, the agency's executive director since last April, the agency now has stable funding for a full five years.

While larger projects are in design to double the state's transportation capabilities, the agency has taken steps to meet the demands of a growing population. It has added new multilevel rail cars that allow 20 % more seats. As of December, the agency had 64 such cars and 55 in service; by next year, NJ Transit is expected to have 279 multi-lever cars. It has also begun modernizing its bus fleet with an order for 1,145 new buses last year, and initiated a study of changing ridership patterns to adjust bus schedules and routes.

Over the past year, the agency has completed the $1.6 million replacement of the Hackensack Bus Terminal, which serves 3,400 passengers daily. Last fall, the agency, in conjunction with Metro North, completed the $3.4 million Pascack Valley Line Siding Project which will allow bi-direction service on the line for the first time and add 127 weekly trains. In the summer, the $4.6 million Newark Penn Station Market Street Access project wrapped up, for better connections between trains and bus transfers.

Later this year the agency is expected to complete several large projects: the $73 million improvement to Newark's Broad Street Station, which serves over 950 trains weekly; the $93 restoration of the Hoboken Ferry terminal, serving 40,000 train, bus, ferry, PATH, and light rail commuters; and the $53.2 million renovation and expansion of the Trenton Station, which serves over 8,000 commuters. Ongoing projects include the replacement of Portal Bridge, estimated to cost between $500 million and $1 billion. The bridge currently has to be opened for marine traffic and disrupts train service. The agency awarded a $5.3 million Environmental Impact Study last year for the project.

The agency's largest project, however, is Access to the Region's Core (ARC), which examines doubling trans-Hudson rail capacity to midtown Manhattan through eventual construction of the estimated $7.58 billion Trans-Hudson Express Tunnel. NJ Transit, in partnership with the Port Authority of New York and Jersey and the Federal Transit Administration, is scheduled to release its Supplemental Draft Environmental Impact Statement on the ARC this year for public comment and review, with construction slated to start next year and be completed in 2017. The project will result in a new two-track tunnel under the Hudson River, and expanded rail capacity under 34th St. in Manhattan.