Essex Crossing Developers Close on $30M LES Site for 26-Story Tower
The City of New York has sold an active parking lot at 180 Broome Street for $30 million to the developers of the nearly 2-million-square-foot Essex Crossing megaproject.
Delancey Street Associates (DSA), comprised of BFC Partners, L+M Development Partners, Taconic Investment Partners and Goldman Sachs, is expected to begin construction of a 26-story tower at the Broome Street site later this month, according to a recent press release. The sale closed on Dec. 29, according to property records made public today.
The proposed $300 million mixed-use building will comprise 175,000 square feet of office space, 263 rental apartments (121 that are affordable) and 27,000 square feet of retail space, the release indicates. The building’s cellar will house a section of the Market Line, a 150,000-square-foot market at Essex Crossing. The building, also known as Essex Crossing Site 4, was designed by Handel Architects.
A spokesman for the developers referred this reporter to the release, and its quote from Delancey Street Associates’ Isaac Henderson, the project manager at Essex Crossing: “With mixed-income housing, Class A office space, retail and a section of the Market Line all under one roof, what was once a parking lot will soon be a dynamic place to live, work and visit right in the heart of Essex Crossing.”
To acquire the property, the site was conveyed, or transferred, by the City of New York for a $6 million upfront acquisition payment, Wells Fargo Senior Vice President Elizabeth Oakley told Commercial Observer. New York City Department of Housing Preservation and Development supplied an additional $24 million in the form of a subordinate purchase money mortgage—to be doled out in four annual installments of $6 million.
With the acquisition, the development group also sealed a $296 million package for the construction of Essex Crossing Site 4, expected to open in 2020. Wells Fargo originated $200 million in construction financing—$125 million of which will be held by Wells Fargo while M&T Bank will take on the remaining $75 million in debt, Oakley told CO. In addition, Goldman Sachs Urban Investment Group led a $96 million equity investment on the property—the bank provided 85 percent of the funds while the trio of developers in DSA each supplied 5 percent.
According to Oakley, Wells Fargo has provided a total of $306 million in debt and $91 million of Low Income and New Markets Tax Credit Equity to finance five of the project’s nine buildings—sites two, four, five, six and eight.
Upon the full completion of Essex Crossing, the project will feature 1,079 apartments, approximately 51 percent of which will be affordable. And it will have a 15,000-square-foot park, Splitsville Luxury Lanes, Trader Joe’s, a community center and the new home of the International Center of Photography. It will also host 450,000 square feet of retail space and 350,000 square feet of office space.
“Decades in the making, Essex Crossing is bringing new economic and community resources to the Lower East Side,” James Patchett, the president of the New York City Economic Development Corporation—which handled the award of the Essex Crossing project to the developers via a request for proposals process—said in the release. “With this most recent closing, DSA will help provide high-quality office, retail and housing space to the neighborhood, creating more good jobs for local residents.”
With additional reporting provided by Mack Burke.