Summary

We sold this site, 63-68 Austin Street (aka 91-32 63rd Drive), to a local and private partnership in November 2018 for $6,550,000. At the time, they were the highest and best offer after almost 40 offers and purchased it from a family who owned it for half-a-century. The partnership saw that, though risky, the site could be a candidate for a rezoning because the lot had an R4, low density zoning district but shared a border with a neighboring high-density R7-1 zoning district.

One year later, in November 2019, the new owners filed to start the rezoning process. After a favorable vote from the Community Board and the Borough President, in March 2021, the City Planning Commission approved and City Council adopted the rezoning, creating an R7A zoning district with a C2-3 overlay, while at the same time designating the site a Mandatory Inclusionary Housing Area. This means that 30% of the residential units must be permanently affordable units for residents with a weighted average of 80% Area Median Income (AMI). The entire rezoning process took 16 months.

Problem

The corner lot is a 140’ x 100’ irregular, 13,731 sq. ft. site abutting the Long Island Railroad (LIRR). The rezoning allowed for a developer to build a 63,163 Sq. Ft., 9-Story Mixed-Use building consisting of 12,114 Sq. Ft. ground floor retail and

70 residential units above, totaling 51,049 sq. ft. Forty-nine (49) of the residential units will be Market Rate and Twenty-one (21) of the residential units (30%) will be affordable units at a weighted average of 80% Area Median Income (AMI) (Option 2).

Most developers, especially in Rego Park & Forest Hills, did not have experience building in a Mandatory Inclusionary Housing area. To educate the buyer base, we put interested parties in touch with experts in the affordable housing space, including not-for-profits and tax consultants so they could better understand the process. This way, we assured the site would sell to a qualified developer who would build affordable housing on the site, as intended by the community.

Solution

Once the partnership retained us exclusively to market the site, we employed a surgical marketing process which netted us 27 submitted offers from qualified developers during our 1st round of marketing. For our 2nd and final round of marketing, we employed a bid-deadline approach which brought us to 37 submitted offers, achieving a sales price of $10,500,000; $500,000 above the starting bid price of $10,000,000. The ultimate purchaser, a local developer, signed a contract 2 days after the bid deadline and closed 90-days later in an all-cash transaction. This process showed a gross profit to the sellers of $3,950,000 in less than 2 years!