Stephen G. Kliegerman
President of Development Marketing
By Steve Cutler
Its staggering decade-long, rags-to-riches rise made a revitalized Harlem the media superstar of the Manhattan real estate boom.
Which makes its steep fall all the more tragic. According to data from Miller Samuel, Harlem saw only 83 co-op and condo sales in the first two quarters of 2009, a more than 51 percent plunge compared to the 171 sales from the same time last year.
But at least one bold and unique new project is coming to market and could be a new bellwether for future residential activity there.
Indeed, strong sales at PS90 Condominiums -- a $40 million conversion of a century-old public school that just opened its sales office last month -- could be an important boost for the Harlem market.
In many ways, the project, which is located at 220 West 148th Street between Adam Clayton Powell and Frederick Douglass boulevards, seems well suited to this type of market.
For one thing, 20 of the building's 74 units will be middle-income, a fact that has earned the project the blessing of the non-profit Harlem Congregations for Community Improvement, which is helping to market the affordable apartments.
The remaining 54 market-rate units will include three studios, 18 one-bedrooms, 32 two-bedrooms and one three-bedroom. The apartments are going for between $450,000 and $899,000, and are priced to sell, according to Alicia Glen, managing director of the Goldman Sachs Urban Investment Group, which is financing PS90. Perhaps even more important these days, they were priced to get financed.
"They are all priced so that you can get Fannie Mae conforming mortgages," Glen said. "We're very sensitive to price point, not just price per square foot," which ranges from about $600 to $700.
Glen added that because L & M Development Partners, the developer of PS90, got involved in March 2008, after the height of the market, it can offer "real affordable alternatives to a lot of the other stuff on the market, because [competing projects] have had such a huge basis that they can't take lower prices."
The cost basis for L & M was partly kept down because the company bought the property from the city at a sizable discount, primarily because after being abandoned for 30 years, it was a wreck.
"The Board of Education and the School Construction Authority evaluated whether there was any cost-effective way to reconstitute it as a school," said L & M vice president and PS90 project manager Jon Cortell. "Their estimated costs were just extraordinary, astronomical numbers."
L & M "paid for the required demolition and cleanup," he said.
The apartments, which are being marketed by Halstead Property, also come with a J-51 tax abatement, which will keep maintenance charges down for 15 years. That could be a big selling point for potential buyers in this down market.
The high-capacity 1905 steel frame was in good shape, but most of the building's interior was beyond repair, including all the concrete slab floors, which had to be torn out and replaced.
The building's elaborately ornamented Gothic terra cotta and limestone exterior will be re-pointed and restored to its original detail, down to the playful gargoyles and beaver and eagle stone carvings.
The front and back courtyards on West 148th and 147th streets, formed by the H-shape of the building, will be landscaped, giving interior apartments garden views.
The south-facing upper floors, meanwhile, will have Midtown views and several north-facing units will have a clear view of Yankee Stadium. The apartments will have 12-foot ceiling heights and 10-foot-high windows -- big, explained Cortell, "because it was designed before there was a tremendous amount of electrical illumination."
The building's designer, Charles B. J. Synder, chief architect and superintendent of New York City schools from 1891 to 1922, "was one of the catalysts for the expansion of window sizes," Cortell added. "He helped to create these open windows that would bring light and air to schoolchildren."
The school's top-floor gymnasium and locker room were the most distressed areas of the building, requiring the most renovation. A new floor was also erected on top of the existing school, which will contain glass-walled penthouses with large private rooftop terraces.
A new parapet matching the scheme of the original façade was designed by the architect Mark Ginsburg to obscure the penthouse addition. For one of the one-bedroom penthouses, Ginsburg sculpted a gargoyle with its tongue sticking out on the parapet that joins the new construction to the old.
"Clearly the original builder had a sense of humor," said Ginsburg. "Although it was a school, these gargoyles are pretty silly and wonderful."
In the entrance lobby, Ginsburg was faced with the challenge of adding an exposed balcony that winds around the 24-foot-high space at mid-height without drastically interrupting the dramatic open expanse.
"To support that balcony," he explained, "instead of having columns below, which would have really gummed up the entry, we are hanging it off the ceiling. There are rods that come down and pick up the structure."
Halstead opened an off-site sales office last month, and the building will be ready for occupancy sometime in the spring or summer of 2010.
The fact that the condo is located in an old school, said Stephen Kliegerman, director of development marketing for Halstead, "gives us fun things to play with" -- a refreshing contrast, he added, "to selling this lifestyle of a couple in a tuxedo looking out onto the skyline."
But really, how much fun can it be selling apartments in Harlem right now?
"The truth of the matter is that we've seen a lot of success in Harlem since the beginning of the year," said Kliegerman. "We've sold 22-plus units at Kalahari; 10-plus units at Graceline Court; all five units we inherited at Strivers West; and Savoy West sold the majority of its units."
Product in Harlem selling for $600 to $700 a square foot is moving, he said.
PS90 has several units listed in the low-$500s a square foot (according to listings posted on the Web site of Halstead's sales director for the project, Sidney Whelan). And few go above $700 a square foot.
It certainly looks like the building may be off to a good start. Three days before the building opened its sales office, it clinched its first buyer.
"We have a verbal offer that has been accepted already," said Glen. "At ask!"
Thursday, October 01, 2009
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