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Developers outline plans at recent NACORE luncheon.

Larry Silverstein, president, Silverstein Properties, Inc., outlined the 13-year saga of his latest project to members and guests at a recent NACORE luncheon. The West 42nd Street site he purchased in 1984 has been the subject of rezoning and litigation and is finally being developed to add to the City's residential rental housing stock.

Silverstein Properties is building two residential towers designated as 80/20 housing, eligible for substantial tax abatements. In his inimitable story-telling style, Silverstein told the tale beginning with the $20 million all-cash purchase of a parking lot site zoned for single-story industrial. The site was rezoned in 1989 for residential, commercial and retail building and appraised at $120 million. But the story doesn't end there.

A "concerned citizen" sued the city for granting the rezoning and litigation ensued for three years. By then the cost of the investment was up to approximately $40 million to $45 million. Meanwhile, the city's economy revived and a shortage of residential rentals became a reality.

"Building 20 percent subsidized housing units allows you the availability of triple tax-exempt financing, the cost of which is about 6 percent fixed for 40 years," said Silverstein. "That means a savings of approximately $6 per square foot in real estate taxes."

The development project consists of two residential towers, 40,000 square feet of retail space, and a 900-car parking garage. The cost of the project for land and construction is approximately $400 million. Tower I is slated for completion by the end of 1999.

Bruder Discusses Developing Contaminated Properties

Ronald Bruder, president, The Brookhill Group, a veteran in the acquisition and redevelopment of distressed properties, has teamed up with Dames & Moore, environmental remediation specialists, to buy contaminated properties and clean them up.

Dames & Moore/Brookhill, LLC is taking advantage of the brownfields opportunity, which involves federal regulatory provisions designed to facilitate and encourage the clean-up and redevelopment of blighted, contaminated properties. Propelled by the U.S. Environmental Protection Agency (EPA) initiative, states are enacting voluntary clean-up legislation designed to encourage clean-up of properties intended for commercial and industrial use. Less stringent standards than for residential properties significantly changes the economics of remediation.

Bruce-Scan Reshen, president and CEO of Dames & Moore/Brookhill, who has overseen nine million square feet of rehabilitated property, said "The key for us is being able to evaluate and understand the issues of contamination and to accurately estimate the cost and time frame of remediation."

According to Bruder, "Buying contaminated properties demands creativity and patience. There are no cookie cutter deals." Dames & Moore/Brookhill has the ability to buy debt, is positioned to go into the chain of title and to negotiate with regulatory agencies on standards of remediation, he said. To deal with liability issues, the company arranges well thought-out insurance programs for each deal.

"We stand between the seller and the raging bull of liability,' said Reshen.

The New York Chapter of NACORE hosts luncheon meetings on the last Friday of every month, featuring leaders in the industry who can provide valuable information to real estate professionals and their service providers.

The next NACORE luncheon meeting will be held on Friday, May 30th and will feature Charles Millard, president, New York City Economic Development Corporation, who will speak on New York City incentives.

For information regarding the next luncheon, contact: NACORE at (212) 5511109.
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Publication:Real Estate Weekly
Date:May 28, 1997
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