West 28 Street development site in the news (again)

some stories write themselves
Of course I started thinking about the past Manhattan Loft Guy series about how developing neighborhoods (such as the typical Manhattan loft neighborhoods) develop, that is to say, change, when I saw this piece in the Commercial Observer about potential hotel development on the parking lot at 140-144 West 28 Street (h/t The Real Deal). If I were working with a loft buyer or seller in the high 20s just east of Seventh Avenue, I’d be worried about site lines if a 20-story full lot hotel went up on that parking lot. In checking to see if I have written about residential lofts that might be relevant, I hit the jackpot. Raise your hand if you know that I already wrote about (part of) this very same potential development in my December 20, 2011, development watch: West 28 Street, between 6th & 7th Avenues.

That post dealt with a Crain’s article that sounds like the Commercial Observer’s (this quote is from Crain’s):
 

The buildings at 146-148 West 28th Street and parking lot at 140-144 West 28th Street offer 170,000 feet of buildable space, Crain’s said, and so could make the perfect site for a new hotel

This quote is from Manhattan Loft Guy:
 

This story is perennial because something is always changing, somewhere in Manhattan. You might think that this is so obvious that only an idiot would take time to make the ‘point’ (thankyouverymuch), but then you would under-estimate the ability of Manhattan apartment and loft dwellers to ignore what is (and is not) around them.

As luck would have it, this specific story is not so much perennial, as cyclical. Having not sold 2+ years ago as a package with the small building next door at 146 – 148 West 28 Street, the owners are trying again. Back then, the combined lots were, of course, much bigger (“12,083 sq ft”) but most of the development rights seem to be with the “7,583 sq ft” parking lot, as the marketing claims “144,876 sq ft” are available for development.

Not that we should take anything that real estate brokerage firms say at face value, but the listing agents are quoted as saying the firm is:

evaluating offers [plural!] now and expects to reach a deal sometime in July. If a deal is not concluded before that time, a bid deadline will be set sometime next month.

So maybe it will happen this time.

swimming with The Shark
Or maybe not (it didn’t last time). The ‘old’ plan was to sell the parking lot with the building next door, but the Property Shark page for that building suggests the owners are doing enough upgrades to that building to preclude sale as a tear-down. Perhaps development rights from the building have been transferred to the lot? Interesting thing about that building … despite the manufacturing zoning (M1-6), there have been people living there in broad daylight since at least 1992 and as recently as 2012, based on the Voting Registration section of The Shark.

Looking at The Shark on the parking lot, I have to assume that the 2011 marketing effort was on behalf of a buyer-in-contract, as that lot was not sold to the LLC that already owned the building at #146 until February 2012, for $21.5mm (or $284/ft, assuming a building only as large as the F.A.R. of 10 allows; or $148/ft if a building as large as the “144,876 sq ft” in the Commercial Observer article says can be built there). I am no student of commercial development, but I have to wonder about the economics … guys who paid $21.5mm in February 2012 think they can get “up to $330 per square foot for hotel use and up to $600 per square foot for residential, [as] Mr. Scandalios said”??

I also have to wonder if they are second-guessing their strategy. On the one hand, “[t]here are some investors thinking about the site for residential and its [sic] significantly more valuable as residential, but the highest and best use is as a hotel since it’s zoned for commercial use”; on the other hand, “[t]hough residential development is possible, it would require a zoning change, a process which could take up to 18 months” (my italics, of course). Let’s see … they bought in February 2012, and are talking about a deal in July 2013 … nearly 18 months.

enough about them, back to Manhattan Loft Guy
Of course, the fun parts of the blog post series, exemplified in that December 20, 2011 post are about View Diligence (with horror stories!) and the fact that stuff … happens. Things change, probably more dynamically in Manhattan than elsewhere, though that’s just a theory about a town in which everything has pretty much been all about money pretty much forever (and by “forever” I mean since 1625).

If not now for this parking lot on West 28th Street, then eventually. Tempis fugits, indeed.

© Sandy Mattingly 2013