Luxurious Repurposing

By Diane Greer

Myles Horn, principal of MJH Birchwood LLC, New York, has been purchasing unsold blocks of co-ops in existing buildings for the past 30 years, renovating and then selling them to individual buyers.

The deals are win-win propositions for the buyers and the developer. Horn has full sponsor rights, and so buyers get to bypass the board approval process and close on a deal quickly. And Horn says that for him, it’s easier than building from the ground up because “you don’t take the same risks or incur the same costs.”

The Towers at Water s Edge in Bayside, Queens, is the latest renovation project undertaken by developer Myles Horn of MJH Birchwood.

The process also allows Horn to quickly bring the units onto the market. New construction takes 18-months to build and then you have to get the offering plan through the Attorney General’s office, Horn explains. “How will I know what the market is going to be like in 18-months to 2-years? This enables you to sell immediately.”

Horn’s latest project, the Towers at Water’s Edge in Bayside, Queens, consists of three, 16-story high-rise towers overlooking Little Neck Bay. The 832-unit complex was built in 1969 by Birchwood and converted to co-ops in the 1980s. Amenities include a heated Olympic-sized swimming pool, fitness center, entertainment room, five tennis courts, shopping arcade, underground garage with valet parking and 24-hour concierge and doorman.

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After the buildings were converted and the initial number of apartments sold, the Birchwood Organization decided to retain the remaining unsold units as rentals. Over the years units vacated by rent-stabilized tenants were rented again instead of sold.

When the sole owner of the Birchwood Organization died, his estate put all the unsold units in high-rises built by his company up for sale. Horn acquired 500 units from the estate in March 2007, of which 230 were in the Towers at Water’s Edge. Of the 230 units, 170 were free-market tenancies.

Renovation of the units in the Towers is targeting empty nesters seeking to sell their homes on Long Island or in Queens and downsize and younger buyers priced out of the Manhattan and Brooklyn markets.

Horn approached the renovation as if it were a new construction project. He enlisted Freyer Collaborative Architects of New York to redesign the apartments and Gail Horn Designs and Design Promotions of New York to do the interiors.

“The main goal of the project is to produce a renovation unique in the co-op industry,” says Lawrence Shapiro, president of Lawrence M. Shapiro Inc., the owner’s representative on the project. “We tried to create a product that was similar to a new construction with a more open floor plan.”

The entrance to the complex was redesigned with new stonewalls and islands with plantings. Two circular driveways leading to the towers were renovated and landscaped with classical French gardens.

The redesign modified existing floor plans by removing walls and creating more free-flowing space between kitchens, living rooms and dining rooms. To appeal to people moving out of large houses and downsizing, the project combined two one-bedroom apartments to create two-bedroom units with a large living room, formal dining room, large kitchen with a pantry, oversized marble bathrooms and walk-in closets.

“We also knocked down walls in some of the three-bedroom apartments to make them more luxurious two-bedroom units or two bedrooms and a den,” says Gail Horn, president of Gail Horn Designs.

Opening the floor plans made the units brighter and took advantage of the panoramic views. Every apartment features large expanses of windows and terraces with views of Little Neck Bay, Long Island Sound, the city skyline or the Whitestone and Throgs Neck bridges.

Construction, encompassing over 200,000 sq ft, was started in August 2007. Units were completely gutted and rebuilt. “We did everything to create a feeling that you are buying new construction as opposed to a renovation,” Shapiro says.

Kitchens include stainless appliances, CaesarStone composite quartz countertops, custom-crafted maple cabinets and marble and porcelain tile backsplashes. Baths are outfitted with ceramic tile floors with marble mosaic borders, marbleized porcelain wall tiling and single-slab vanity countertops over ebony-stained cabinets.

Construction crews installed new raised panel doors and doorframes, base and crown molding and custom maple floors with 5-in. planking. Interior finishes were selected to be light and bright. “We wanted to take a young, fresh approach,” Gail Horn says.

Given the age of the buildings, a decision was made to put new plumbing in the walls and to replace the shower bodies. The electrical distribution system was also upgraded, and all residences were prewired for cable and Internet and include digital light dimmers.

The 16-story, 832-unit complex overlooks Little Neck Bay.

Performing demolition and construction in an occupied building presented logistical challenges. “Everything needed to be done with an eye toward not disturbing the existing tenants,” Horn says.

The team worked with the co-op and its board to coordinate water and electrical shutdown and use of the buildings’ passenger elevators for deliveries and debris removal. (The buildings do not have freight elevators.) Construction was not permitted after hours, on weekends or holidays.

Fans were put in units under construction and grills covered to prevent dust and fumes spreading to other units. Each day protection was put down in the hallways and lobbies and removed in the evening. “We have a team whose sole job is to clean up at the end of the day,” Horn says.

Horn is also footing the bill to improve the property and its common areas with an eye toward repositioning the building in the market. The entrance to the complex was redesigned with new stonewalls and islands with plantings. Two circular driveways leading to the towers were renovated and landscaped with classical French gardens.

Redesign of the entertainment room created a media room in one-third of the space, featuring a living room-like seating area lined with wood paneling and carpeting. The room is equipped with a flat screen TV, kitchen and bar.

The remaining space, which was left open for parties, includes a large projection screen that can be raised and lowered from the ceiling. French doors replace a former emergency exit and open onto to a terrace with a pergola and seating area overlooking the pool.

The shopping arcade was given a contemporary look with new porcelain tile walls, lighting and glass panels fronting each of the retail shops.

Horn is approaching the sale of the units as if it were a new condominium project. A sales office is open seven days a week and offers buyers tours of a dozen furnished model apartments.

Pricing for the one- through three-bedroom units range from $300,000 to more than $795,000, with monthly charges of $608 to $1,976. “Of the 170 free-market units we have already sold 115 of them in what everyone says is a deteriorating market,” Horn says.

He attributes the sales success of the project to the quality of the renovation, the amenities and the affordable price point. Units at the Towers are selling at $500 to $600 per sq ft, while new construction in Manhattan is priced at $1,500 to $2,000 per sq ft, Horn says.

Plans call for completing renovations by spring 2009. The remaining units will be rebuilt as they are vacated.

Owner / Developer: MJH Birchwood, New York, a joint venture between Angelo Gordon, Belvedere Capital, San Francisco and Myles Horn.
Owners Representative: Lawrence M. Shapiro Inc., New York
Architect: Freyer Collaborative Architects, New York
Interior Designers: Gail Horn Designs, New York; Design Promotions, New York
Construction Managers for Apartment Renovations: DBD Services, Freeport, N.Y.; Shuster Management LLC, Jersey City, N.J.
Construction Manager for Common Area Renovations: Ball Construction, New York