Halstead Property

Richard Grossman
Executive Director of Sales, Downtown
rgrossman@halstead.com
(212) 381-4274

Rudins' Village Gamble Back In The Works

By Amanda Fung

Four years after the Rudin family unveiled plans for a massive residential development in Greenwich Village, and a year after those plans were derailed by the bankruptcy of the site's owner, Saint Vincent Catholic Medical Centers, the project is back on track.

As it turns out, the timing couldn't be better for what will be the largest condominium complex to be built in the neighborhood in more than a decade. The market has stabilized in recent months, and banks have even begun to lend again for the soundest developments.

If everything proceeds as planned, the renowned real estate family expects to begin developing seven residential properties on St. Vincent Manhattan's East Campus on West 12th Street sometime next year, according to William Rudin. When the project is completed, it will boast about 300 condo units, plus five townhouses.

“We will create a unique [yet] traditional type of residential environment in the Village,” said Mr. Rudin.

More specifically, he promises one of Bing & Bing quality—referring to the developer whose stately, spacious and elegant brick apartment buildings, constructed in the prewar years, set the standard for luxury properties that still holds today.

Real estate brokers predict a warm reception for the new condos, which will be erected in a part of the city where the market has held up better than in many others. Last year, median sales prices for condos in Greenwich Village hit $1.8 million, up 6.8% from 2009 levels, according to appraisal firm Miller Samuel Inc. That compares with a 2.4% rise to a median price of $1.1 million in the overall Manhattan condo market.

“It's a desirable neighborhood,” said Richard Grossman, executive director of downtown sales for brokerage Halstead Property. “Greenwich Village can support new development done right. The units will be sold quickly.”

The Rudins' plan calls for tearing down two old Seventh Avenue hospital buildings and constructing a 200-foot-high condo tower in their place. To the east of that, they intend to construct five townhouses. The residential buildings on Seventh will have 10,000 square feet of retail space.

While the proposed residential buildings will be separate, Mr. Rudin said, they all will be connected underground. This will allow residents to share amenities and services, which will include parking, a health club and a playroom.

The chances that the development will come to fruition are now good.

The Rudins' plans were approved by the city Landmarks Preservation Commission nearly two years ago. Last week, SVCMC reached a deal with the Rudins and the North Shore-LIJ Health System under which the Rudin family will pay $260 million for the eight hospital buildings, as well as lots and parcels of land around 12th Street and Seventh Avenue. The Rudins will transfer one of those properties, the O'Toole Building, to North Shore-LIJ, which will convert it to a health care center offering emergency-department services.

Please, judge, please
But the project still needs to overcome several big hurdles. The deal must win bankruptcy court approval. Only then will the developer be able to begin the lengthy city rezoning process, which can take as long as six months, to make the East Campus available for residential use. Mr. Rudin said he expects to start the zoning process as soon as next month.

Additionally, residents and local preservationists are still concerned about the sheer size of the new tower, as well as other details of the development. They hope to address these matters during the public review of the rezoning.

“The bulk is too great, especially on the Seventh Avenue site,” said Carol Greitzer, co-chair of the West 12th Street Block Association and a 50-year resident of the neighborhood.

She also opposes plans to put an entrance for the new complex's garage on West 12th Street, which already has three—the most among any block in the Village, according to Ms. Greitzer.

The biggest challenge that the project faces is one familiar to all developers since the real estate crash: obtaining construction financing. The Rudins' chances of nailing down a loan are better than most, thanks to their long track record—three generations and counting—and the development's location in a prime part of town, which has seen little in the way of new housing lately. But getting funded is hardly a sure thing.

While Mr. Rudin declined to disclose the cost of the project, he is optimistic that he will be able to secure a loan. He has an extra edge because he is planning to build condos, which typically give developers higher and quicker returns on their money than rentals do. Mr. Rudin attributes the decision to build condos to what he calls “the economics of the deal.”

Sunday, March 13, 2011