Ask Chelsea residents about 'cooled' market.
Fast forward to now. How the Chelsea-Village Partner ship must be fuming...
Thanks to a substantial rezoning in September 1999, the Chelsea streetscape is buzzing. Literally. Cranes tower over mid-rise buildings and, on several blocks, the skeletal frames of condominium buildings top out over 12 stories. Cavernous holes are barricaded -- the most ubiquitous located on the corner of 23rd Street and Sixth Avenue. Noise and the detritus of large scale construction abounds as scaffolding spreads like kudzu over exposed sidewalks.
Many of these residential buildings are selling out before condominium one has been built. For brokers and developers, the feeding frenzy is consuming all viable space in a neighborhood that, once featured slots between buildings (i.e. parking lots). The marketing of Chelsea has also extended its reach north, into Clinton, though the city maps beg to differ on where this booming neighborhood ends in the west 20's.
One would be hard-pressed not to run across the word "hip" in any broker's Chelsea tip sheet. Barbara Corcoran even referred to this area as "Nirvana."
But this Nirvana is best reached on foot, as the vast number of parking lots are gutted in favor of residential projects.
"It used to be that they tore down a building to put a parking lot there instead," said Joel Stahl, the executive director of. the Metropolitan Parking Association. "Now, they are putting the buildings back up."
Not surprisingly, said Stahl, most of these lots operate under a thirty-day cancellation lease. If the right offer is made, the landowner can sell within a month. But there is more to this story than temporary leases. A shockingly fierce real estate market is turning asphalt and car forklifts into gold.
Take the 17,500 SF lot on Seventh Avenue and 17th Street. This old parking lot was purchased in 1998 for $5 million. The space is L-shaped and through-the-block, not a conventional site for residential construction, but that matters little today. A group of Israeli investors bought it over the summer for $13 million. The developers plan to build a 120,000 SF condomnium with 137 apartments and, in keeping with the site's history, a 74-space parking garage will be built in the basement.
Anne DeMarzo of DeMarzo Realty brokered both deals. She laughed when asked about her commission on the deal.
"This area is just too hot right now," said Demarzo, shrugging off the question. "I've been involved with it for a few years now."
Her opinion of Chelsea is right on the mark from a developer's standpoint. Just across the street from the $13 million site, another parking lot was sold to residential developers over a year ago. It once served as the parking lot for Barney's office workers and, after becoming a commercial lot, hosted a regular, early morning group of Chelsea residents with their dogs. Last year, however, the barking was replaced by the thuds and concussions of earth-moving machinery and, now, a 12-story structure rises up from the site.
Barbara Corcoran of the eponymous Corcoran Group claimed via e-mail that the "new construction will bring style and sophistication to the former Barney's parking lot," adding that "Chelsea has become one of the most desirable residential neighborhoods." Only three blocks north of the Corcoran site on the avenue, a gas station was demolished earlier this year. The site, which runs from 20th to 21st street on Seventh Avenue, will be developed by the Related Companies.
"This property is clearly worth more as a residential concern than as a gas station," said David Wine, vice chairman of the Related Companies. The 15-story "midrise" will be rent-only apartments. Robert A.M. Stem will design the building. Wine also mentioned that Related will, develop a site on 23rd Street and Tenth Avenue that was once a parking garage.
The best way to gauge how cutthroat the development scene is would be to list the projects that cannot be discussed. There are several top secret developments in the works.
Andrew Gerringer, the senior vice president of Douglas Elliman, called Chelsea "the affordable answer to SoHo and TriBeCa." When asked about the lucrative parking lot scene, he admitted that "we are talking with an owner of a parking lot at the moment" but hastened to add, "I can't tell you where in the neighborhood the parking lot is located." Gerringer also claimed that Douglas Elliman "[was] the first to discover Chelsea." As for some of the other projects that he is working on, he declined to discuss them -- again, top secret.
The Corcoran Group is also working on hush-hush projects, according to Jane Gladstein, the executive vice president of Corcoran Group marketing.
"We have three developments in the works in Chelsea right now," she said. "I cannot tell you about the third, however."
Gladstein acknowledged that "every developer is looking for land in Chelsea."
Desirable and bursting at the seams, perhaps. Though the O-word (overdevelopment) is rarely uttered among brokers and their ilk, one longtime Chelsea resident sees the prosperity as a double-edged sword.
"I've lived in Chelsea since 1963," said Ed Kirkland, who was once head of the Chelsea Preservation and Planning Committee. "Baok then, you couldn't get a good meal. Now you can't get a cheap meal."
Kirkland lamented the fact that many local businesses had been driven out in recent years, and called the abundant developments "unfortunate" for the neighborhood.
"There has been overdevlopment, especially on Seventh Avenue. These buildings are much higher than we wanted them to be," said Kirkland. But he admitted that the area is safer as a result of, in his words, "that gentrification."
The manufacturers who once thrived in Chelsea have gradually been pushed west. Kirkland expects that this area, too, will be rezoned for residential use soon. "That would also be unfortunate," he said.
Anne DeMarzo viewed it as inevitable.
"The area will continue to thrive and the reach of the developers will spread west," she said. "It is only a mater of time until the rezoning of this area occurs."
As for the O-word, DeMarzo failed to see it.
"There is no overdevelopment in Chelsea," she said, matter-of-factly. "There's plenty of room for everyone."
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|Publication:||Real Estate Weekly|
|Date:||Oct 11, 2000|
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