Summary

11-32 31st Avenue in Astoria, Queens, is impeccably situated right off of the East River. The subject property is a 7,000 sq ft, 46 ft x 125 ft L-shaped lot, improved by a single-story cellar and a 3,500 sq ft warehouse building. The site is located in an R7A zoning district within a Voluntary Inclusionary Housing Zone, offering a developer an as-of-right FAR of 3.45X, or 24,150 sq ft of ZFA. For an affordable housing project, a bonus FAR of 4.6X is available, allowing for up to 32,200 sq ft of ZFA.

Problem

The seller, Mr. Rosner, owned the property for 50 years, during which he operated "Rosner Custom Sounds," a pioneer in the sound system industry. As he decided to wind down his business, he sought to monetize the property by selling it to a developer. Mr. Rosner also resides in and owns the 2-family home connected to the rear L-shaped portion of the subject property. One of the challenges in this transaction was that Mr. Rosner parks three classic cars behind his home, using the L-shaped portion of the property to access the parking area. Any new development would require the granting of a right-of-way easement post-development to allow Mr. Rosner to continue parking his cars in their designated spots. Additionally, during construction, the cars would need to be temporarily relocated to indoor parking spaces in the nearby area. Despite marketing the site during the COVID-19 crisis, the owner remained firm on his pricing, aiming to achieve over $5 million for the property.

Solution

We got creative and showed the owner how he could monetize his current residence without selling it by transferring air rights from his home, which was connected to the subject property via the rear in an L-shape. Using our strategic marketing approach, we identified a developer who would: 1. Grant Mr. Rosner a right-of-way post-development to access his parking spaces via the new development's lot, 2. Purchase 3,000 sq ft of air rights from the seller's residence, while preserving some air rights for future use. This arrangement was designed in a way that did not negatively impact the seller’s two-family home, and 3. Cover the cost of temporarily relocating the seller’s three vehicles during construction, which we were able to find parking for on the same block. This creative solution enabled us to successfully navigate the complexities of the transaction.

The site went under hard contract at the beginning of the COVID pandemic, and given the tough lending environment, we negotiated with the developer to file Demolition Plans and New Building Permits with the owner's full cooperation during the contract period. When the developer needed an extension on closing, the seller agreed to grant the extension with a release of escrow and a $20,000 per month extension fee, which ultimately extended for an additional 6 months. This arrangement allowed the seller to earn monthly income while the developer completed the necessary filings for plans and permits and secured financing for a smooth closing. As of May 2020, the two parties were set to proceed with a contractual relationship once construction financing was secured. Development Site Advisors® exclusively represented the seller and was the sole broker in the transaction. The property and air rights closed in an all-cash transaction on Friday, July 23, 2021, for $5,500,000, equating to $183 per ZFA.

What Is Being Built?

The developer has filed new building permits to construct a 29,966 sq ft, 8-story, 80-foot tall, 29-unit apartment building.