The Durst Organization's Hallets Point megaproject, the $1.5 billion, 2,000-apartment development expected to transform the Astoria waterfront, will not move forward as planned. DNAinfo reports that a day after the January 14 groundbreaking for the project's next phase, which was widely publicized and attended by Mayor Bill de Blasio, the Durst Organization announced it would not move forward because it would cost too much to build without the city's lapsed tax exemption program. [Update: This doesn't mean that Hallets Point is in the can, just that without the abatement the project is in jeopardy. The megaproject's first phase, on which construction's already started (more on that later), will continue to move forward.]
"Without a new 421-a or a replacement program, we can't continue with the project. Nothing can be done," a Durst Organization spokesman said. "Without the abatement, the economics for the project collapse and we couldn't get a construction loan."
The Hallets Point megaproject was poised to deliver 483 affordable apartments20 percent of the development's 2,000-some unitsto the neighborhood, which qualified it for major tax breaks under 421-a. Without that break, the Durst Organization's spokesman says, the taxes are "just crushing."
With 421-a's lapse, developers claim that it will be too expensive to build rentals throughout the city. To offset the cost of land and construction, building condos has become more feasible.
The Real Deal crunched the numbers for construction permits issued in January, the first month new developments wouldn't benefit from 421-a, and found that permits for only 453 apartments were issued by the Department of Buildings in that month. The number is 94 percent lower than the month prior, when developers scrambled to push plans through before the expiration. It's also lower than the monthly average during 2009, the worst year of the recession.
The Durst Organization broke ground on the first building in the Hallets Point project prior to the tax exemption's expiration and will move forward as planned. The building will have 400 apartments, of which
more than 80 percent 20 percent will be affordable, as well as a a supermarket.
· Hallets Point Project's Next Phase Halted a Day After Its Groundbreaking [DNAinfo]
· Arrested Development: Residential construction permits dropped 94% in January [TRD]
· Astoria Waterfront Braces For Influx of Luxury Apartments [Curbed]
· All Hallets Point coverage [Curbed]