When we wrote about plans for 221 East 138th Street last summer, the developer hoped to include affordable housing in the new South Bronx building. Now Anthony Gurino, of Tahoe Development, has decided to make the project in Mott Haven entirely market-rate, joining the ranks of a few other ambitious projects in this industrial neighborhood.
This is, of course, because the 421-a tax exemption disappeared in January. Without the tax break, the owner can’t afford to rent any apartments for below-market rates. The size of the building has also shrunk, because it would have gotten a floor area bonus for the affordable units. The height has dropped from 10 stories to seven, and the residential space has been reduced from 47,000 to 33,000 square feet.
The architects sent along a rendering of the seven-story building, which will break ground soon. The project, which has been named “The Joinery,” will host 47 apartments. Those 47 units will be divided across 33,300 square feet, and average units will measure just over 700 square feet. Tahoe is still considering whether the project will be condos, rentals, or a mix of the two.
There will be 3,900 square feet of retail, plus amenity space on the second floor and 21 parking spots between the ground floor and the cellar.
Michael Muroff Architect is designing the building. It will bring new life into this partially vacant block, and the rendering – complete with colored accent lighting – gives us a bit of a Williamsburg new construction vibe.
Tahoe purchased the property in September for $2,800,000, paying $75 a square foot for their planned building.
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Make money on a development, that show the methods of professional services.
Maybe I’m missing something here, but let’s assume each apartment rented for $1,000 a month. That’s 47*1,000 = 47,000 x 12 months = $564,000/year. If he paid 2.8 million for the property, then he makes that back in 5 years. Now of course I’m not accounting for maintenance, architectural/consultant fees, filing fees, marketing, etc, but figure after 6/7 years he starts turning a profit. As such with any investment, you have to wait to ream the benefits.
This is the problem with developers and the lack of affordable apartments for the middle/lower middle class I find: they don’t want to wait to make the profit.
You’re not including the cost of construction, materials, or the typical costs of doing business with the DOB (violations, stop work orders, etc, which you have to pay in order to move forward with construction), or the fact that he will have waited a full year between filing permits/purchasing property and breaking ground.
Also the point I make over and over about 421-a is that even in cases like this, where the developer wanted to include affordable apartments, now they cannot. When you’re a small developer who’s already sunk a lot of money into a project, you can’t wait around forever for the state to get its act together on a tax abatement like this. He had to move forward eventually.
So you are saying housing should all be built as charity? Aside from the fact your calculations are off – why shouldn’t they want to make back their money as quickly as possible. A developer is usually not a “landlord”. I mean you can make the same argument about clothing and anything else. Different prices for different wallets.