RFR, Davis to develop rental on 64th Street.

A long fallow parcel of prime Upper East Side territory will be developed into a 31-story luxury rental building and stores by Aby Rosen and Michael Fuchs, along with joint venture partner Trevor Davis. The site at 64th Street and First Avenue is next to the two-story United Artists movie theater that wraps in an L-shape around the corner development site.

"We will build a very large building," said Davis, who heads Davis & Partners, an active general contractor and developer of shopping centers, office buildings and residential projects throughout the northeast and California.

The new project hinged on an air rights purchase from the owner of the theater, Harold Schlanger, who also owns Martin Motor Sales representing Volvo, Honda and Acura. In addition to giving the project the ability to go up an extra ten stories, the purchase also includes 25 more feet of frontage along 64th Street, thus giving the project 5, 125 square feet of base on a 50 x 125 foot lot.

"It's one of the things we wanted," said Rosen. "Otherwise it would be 19 stories. We got a higher, more of a sliver building." Additionally, the developers are cantilevering the building another ten feet over the theater on the southeast side, added Davis.

Under the as-of-right, bulked-up East Side zoning, the tower will be set back at about three stories, and once again at five stories. Several floors will be underground, as well.

"It gives a squarer look," explained Rosen, who said he had always been an advocate of the former tower-on-a-plaza zoning because he felt it looked nicer. "In this instance, you can build more retail and people do like to have a sliver floor building with five to six apartments per floor."

Rosen says 24,000 square feet of the space, comprising the bottom five levels, will be devoted to entertainment, commercial and retail uses. This will be highquality entertainment, he said, in the form of a movie theater possibly, or restaurant. There would also be space for a financial insititution.

While they have received a lot of interest, no leases are signed to date.

Faith Consolo, managing director of Garrick Aug Associates Store Leasing, who is not involved in the project, said the site would be ideal for neighborhood services. "It's restaurant, health and beauty," she said, advising Second Avenue is not quite as upscale as Third.

Nevertheless, the apartments will be luxury rentals with an emphasis on having configurations that can be combined into even larger apartments. "We want to attract families and go for a good mix," explained Rosen. "That's what a good building needs."

According to Nancy Packes, president of Feathered Nest, which will act as the exclusive rental agent, the upper floors will have even larger luxurious penthouse apartments.

The building, she noted, will be the only new construction between the Forties and Eighties. "It will be a full-service luxury building with the highest level of finishes," she added. "The market is ready. The supply is tight. The rental market could support this building." Rents will be set at market at the time the building opens.

While the developers are obtaining 421 a real estate tax abatements, they purchased certificates that permit them to set rents at market on the site. These were purchased from developers who constructed lower income housing at another location.

Jay Gordon Seiden, a partner with Seiden, Stempel & Bennett who handles these kinds of transactions, says 421a certificates can be purchased for between $8,000 and $10,000 per apartment, noting they couldn't be given away a year or two ago as no one could build a building.

Below 96th Street, the 421a program is not available, Seiden said, unless certificates are purchased or the developer creates his own off-site housing or creates on-site housing, as in the 80/20 program, whereby 20 percent of the apartments are reserved for lower income people.

Under various options, the construction of 20 units off-site, say in Brooklyn, could generate four or five 421a certificates per apartment for use in Manhattan, as at this location.

Because the 80/20 421a program is available in their area, says Davis, there still is an opportunity to apply for it as-of-right, and not use the certificates.

"We are under contract for a number of other projects," he added, where the purchased certificates could be used.

This project is as-of-right, Davis noted, because he does not believe in asking for variances. This is a philosophy that is being adopted by even more developers as they watch their colleagues struggling not only with community issues but many additional months of attorney and expert fees.

One hundred and ten apartments are expected to be constructed in the approximately 158,000 square-foot building.

Lehrer McGovern will act as building construction manager, while the architects are Schuman Lichtenstein Claman Efron. The as-of-yet unnamed property will feature glass, brick, and a cast stone facade and have an elegant lobby finished in granite, marble and fine woods. There will be oversized windows, marble bathrooms and hand-laid wood flooring.

"It will be very conservative, with nothing flashy," said Rosen. "It will be more like an old-time, classic building." The building is expected to resemble the Central Park West and Park Avenue style, emphasizing the desired trend back to old-world elegance and materials. "We will be the best and most beautiful building in the area," he said.

Another trend towards "smart" building technology that real estate executives have been seeing in commercial renovations and development will be brought into play in this residential tower. "It will be a clever building with a lot of technology," said Rosen. "It will be a building with modern amenities to accommodate working at home."

The site at one time held an 1884-85 era elevated apartment building. That was torn down in the early 1980s by Trafalger House, which hoped to construct a new condominium and went so far as to construct a foundation.

According to Vahe Tiryakian, a spokesperson for the Dept. of Buildings, the former developers obtained a building permit on December 24, 1981 for a 23--story $6 million structure, probably because one of the incentive programs was about to sunset.

Cunard Line-owned Trafalger House, according to Rosen, sold themselves to Hong Kong Land, which soon decided to go out of development.

"Trafalger just folded up and never got everything together, like the air rights next door," said Rosen. "We were very patient and persistent with the neighbors next door."

The developers purchased the property for $2.6 million in September. Davis said none of the Trafalger benefits would pass to their new apartment tower.

Schlanger, the owner of the building that is leased to the theater, said it will remain a theater. He called the old excavation site a "cesspool" and an "eyesore," and is glad it will be fixed up.

In fact, the former owners received a violation in 1991 because the foundation held a foot of water and was improperly drained.

Rosen said they will be able to use the current foundation and that will cut development time to about 14 months, rather than 18 months.