How Long Should You Wait For the Subway Before Giving Up?

To wait or not to wait, that is the question that engineer Erik Bernhardsson answered in his recent analysis of the MTA’s real-time API. In his post titled NY Subway Math he determined that if you’re in a hurry, you should only wait for a train to arrive for 11 minutes (h/t Technically). At this point, the chance that there’s a serious delay begins to rise. As he notes, “The interesting conclusion is that after about five minutes, the longer you wait, the longer you will have to wait. If you waited for 15 minutes, the median additional waiting time is another 8 minutes. But 8 minutes later if the train still hasn’t come, the median additional waiting time is now another 12 minutes.”

Bernhardsoon started looking at the data to “understand if to what extent waiting for a subway is ‘sunk cost’ vs. an investment.” He illustrates this in the graph above, where you can see how long you’re likely to wait for a train based on how long you’ve already waited. The blue line is the median, and the yellow is the 90th percentile. On a normal day, you’ll wait less than five minutes, but 11 minutes is where you’ll hit that dreaded yellow line that makes mechanical issues, sick passengers, and the like much more plausible.

The ‘Path’ to $4 billion

Architect Santiago Calatrava envisioned an elegant, bird-like PATH station for the high-profile World Trade Center site, but by some accounts what he got was anextravagant symbol of government inefficiency.

Indeed, public perception of the World Trade Center Oculus — which opened last month at the corner of Liberty and Church streets — has been largely soured by its estimated $4 billion price tag that the Port Authority has yet to back up with final numbers. But since Calatrava revealed his design for the station in 2004, the price of the project has ballooned to roughly twice its initial estimation. The overruns were caused by, among other things, the design, the complexity of building underneath the No. 1 subway line, pricey subcontracts, political disputes and Hurricane Sandy.

As costs piled onto the project, the hub’s appearance also changed. Calatrava’s vision of a bird taking flight was dramatically altered when the Bloomberg administration demanded that additional steel be added to the structure for security reasons, a change that led to a bulkier structure. For similar reasons, the hub had to swap its originally planned retractable roof for a skylight that will symbolically open only once a year on September 11. Architecture critics, in turn, have drawn unflattering comparisons of the Oculus to a skeletal stegosaurus.

But the hiccups and design criticisms have not stopped public officials from touting the station as an icon of Lower Manhattan.

“We hope that it will really upend this notion that we shouldn’t serve the public in grand ways and with great design. There’s this idea out there that grand public infrastructure is somehow inappropriate and unjustified,” Downtown Alliance President Jessica Lappin said at a New York Building Congress event in March. “It is big, it is bold, it will inspire for generations.”

An opening ceremony is scheduled for sometime in the spring, as is the opening of Westfield Group’s $1.4 billion shopping center at the hub, whose tenants include Apple, Eataly and an Épicerie Boulud. Passengers are already shuffling in and out of the station and snapping Instagram photos of its blinding white facade and interior.

After-Hours Construction Boom

It’s Saturday morning and the alarm clock is silent — but thanks to a new luxury condominium next door, there’s the deafening roar of a pile driver slamming metal deep into the ground.

For many New Yorkers, this is an increasingly familiar occurrence. According to an analysis by The Real Deal, the city’s Department of Buildings has over the past three years seen a dramatic increase in the volume of after-hour work permits — defined as construction done before 7 a.m. or after 6 p.m. on weekdays or at any hour during the weekend. The number of permits in 2015 — 59,895 — represents a 90 percent spike from 2012, when 31,569 permits were issued. While more permits went toward minor renovations than new buildings —roughly 54.4 percent compared to 32.2 percent, respectively — the list included high-profile new projects like JDS Development Group’s 111 57th StreetExtell Development Company’s Central Park Tower and Vornado Realty Corporation’s 220 Central Park South.

Measured by borough, Manhattan led the list in 2015 with 35,753 permits, followed by Brooklyn with 13,215, Queens with 6,053, the Bronx with 3,744 and Staten Island with 1,125.

Workload demands

Experts attribute the upward shift to two major dynamics occurring in the city’s construction industry: a massive amount of new building and a shortage in skilled labor. The New York Building Congress estimates that construction spending will reach $41 billion in 2016 — the highest in the city’s history. And although employment in the industry is also on the rise (the Building Congress expects jobs to reach 131,800 in 2017), it isn’t growing fast enough to meet demand.

Under these pressure-cooker circumstances, some say that contractors and developers are exploiting the city’s after-work permitting system to get projects done as expeditiously as possible.

“I think it’s because there’s a lot of construction work, and the after-hour permits are needed because there’s actually a shortage of construction personnel,” said Lance Franklin, CEO of Manhattan-based Triton Construction. “There’s a spike in after-hours work to make up for schedule delays, the lack of available manpower and for trying to meet certain deadlines.”

Franklin said that his firm seeks these types of variances primarily for work on new buildings.

The high number of permits granted for renovations stems from the unpredictability of such projects, he said. Discoveries like an error in a floor plan or, say, asbestos behind a wall can create unforeseen delays and knock a project off schedule. “When you open something up, you never know what you’re going to find,” Franklin said. “The schedules are more challenging. You’re finding things that you’re not expecting.”

Similarly, an executive of another construction company, who asked not to be identified, said that the permits are not difficult to obtain and they go a long way in helping developers stay on schedule.   

“It’s what the city allows, so you try to take advantage of what the city allows,” he said.

Murky reasons

In every borough except Staten Island, the top reason listed in 2015 was public safety. In Manhattan, 81 percent of the permits issued were for this reason.

According to DOB representatives, the agency issues permits for five reasons: public safety, emergency work, undue hardship, construction that will cause minimal noise and city construction projects. However, based on TRD’s examination of hundreds of after-hours permits, the explanations provided are sometimes limited and don’t always spell out how the work qualifies as an act of public safety, often only indicating issues such as“traffic congestion” or “business hours.”

Alex Schnell, a DOB spokesman, said that permits issued for public safety serve as a “proactive safety measure” for work that “can’t be performed or would cause an unreasonable burden” during the weekday due to high levels of traffic. He noted that permits are a privilege that can be revoked.

After a spate of press and noise complaints, the DOB recently launched a “comprehensive evaluation” of how after-hour variances are issued. Schnell said the agency wanted to see if there were “alternative options that could be implemented without creating a danger to the public.”

When asked if the study was a response to the high volume of permits granted, Schnell would only say that it was an issue that DOB Commissioner Rick Chandler wanted to look into.

Apart from time, money is an obvious factor. Richard Lambeck, a clinical associate professor and chair of the construction management department at New York University’s Schack Institute of Real Estate, said the increase in after-hours permits highlights the growing prevalence of non-union construction in the city. Non-union workers, who by some estimates work on 50 percent of new construction in the city, are typically able to work nights and weekends without requiring overtime. In those cases, after-hours permits provide a less expensive avenue to getting the work done more quickly, he said. “The volume of work that is going on in New York City is just tremendous right now,” Lambeck said. “It’s using a lot of labor, and it’s using a lot of material, and the problem with this kind of environment is that you have trouble getting the workers you need to get it done.”

Cash cow

For the city, the after-hours permits have provided a growing stream of income. Applicants pay $80 per workday, plus an initial filing fee, which ranges from $100 (for one to three days of work) to $500 for 14 days. The city raked in $25.3 million in after-hour application fees in 2015, compared to $14 million in 2012, according to the DOB. 

Over the last year, after-hours construction has received increasing attention. In 2014, Council Member Rosie Mendez, whose district includes the Lower East Side, the East Village and Gramercy Park, introduced a bill to set new standards for the permits, but the measure never made it out of committee. The bill is currently being amended and will likely be reintroduced before the end of the year. Council Member Dan Garodnick, one of the bill’s sponsors, said he and other council members are awaiting the results of the DOB’s study. “Nearly every Manhattan elected official called on the DOB to put down its rubber stamp and to start cracking down on unreasonable and illegal after-hours construction,” Garodnick said in a statement. “Developers feel entitled to these permits because of lax oversight and enforcement, and the results are quite painful for our communities.”

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MetroCards will soon be a thing of the past

The days of being asked to swipe again and again at the turnstile could soon be ancient history — as the MTA has begun seeking proposals that would move the subway system toward the post-MetroCard era.

The MTA will release paperwork on Wednesday asking companies to submit proposals for ways of paying for rides with contactless media, such as smart cards or mobile devices.

They are hoping that such a new system, similar to payment methods already used in taxi cabs and stores, in which customers only have to swipe their phones, will make MetroCards as obsolete at subway tokens.

“Currently, the MTA is basically in the business of creating its own currency, which is very expensive,” said Riders Alliance executive director John Raskin. “The more it can shift that burden to Mastercard and Visa,the less the MTA has to worry about and the better it will be for riders.”

The agency wants interested companies to submit their vision of how riders will pay the fare by June 23. There was no talk of what accommodations would be made for people with out smart phones or credit cards.

It will take quite a while before the new payment system is ready.

Even though the switchover is supposed to be a part of the MTA’s 2015-2019 capital program, the new method won’t be up and running until at least 2021.

Keith Olbermann Lists Trump Palace Condo, Takes Swipe at Trump Campaign

In March, Keith Olbermann wrote an op-ed in the Washington Post announcing plans to move out of his Trump Palace apartment in New York City due to his opposition to the building’s developer, Republican presidential candidate Donald J. Trump. Now, the liberal news and sports commentator is following through, listing the roughly 1,750-square-foot condo for $3.9 million.

The asking price is significantly less than the $4.2 million Mr. Olbermann paid for the apartment in 2007. He said he bought it at around the height of the market and would be disappointed to lose money on the sale, but added he feels it is worth it. “I feel 20 pounds lighter since I left,” said Mr. Olbermann, who moved out of the apartment in March. As a longtime political commentator on MSNBC, Mr. Olbermann was known for his criticism of right-wing politicians.

Mr. Trump said in an email that Mr. Olbermann “is just trying to use ‘Trump’ to get publicity and stay relevant. The prices of Trump apartments are today, the highest they’ve been. When people find out he is leaving Trump Palace, prices will probably go up.”

The apartment is on the 40th floor of Trump Palace, a 55-story tower that was developed by Mr. Trump in the early 1990s and is managed by the Trump Organization, according toGinger Shukrun of Town Residential, who is listing the property with colleague Wendy Jodel. With views of the Empire State Building, Central Park and the George Washington Bridge, the apartment has two bedrooms and a family room that could be converted to a third bedroom, Ms. Shukrun said. The apartment has three balconies and comes with a 71-square-foot storage room in the basement.

Mr. Olbermann said his unit is “a great apartment,” but leaving the building made him feel “less morally icky.” He added that if it wasn’t a Trump building, he never would have moved. “If they had changed the name of it to something more positive like Ebola Palace I would have happily stayed,” he said. He said he has found another home in Manhattan, but declined to identify which building.

Trump Palace is a full-service building with a 24-hour doorman, concierge, garage, gym, and outdoor children’s play area, Ms. Shukrun said.

Luxury-rental plan abandoned at One57 condo tower

Thirty eight units that were once rentals will be sold at prices starting at $3.45 million, much lower than what other units in the West 57th Street building sold for

Thirty eight units that were once rentals will be sold at prices starting at $3.45 million, much lower than what other units in the West 57th Street building sold for

Manhattan builder Extell Development Co. is retreating from a plan to list 38 units at its One57 tower for lease, choosing to sell them instead as demand for luxury rentals slips amid an abundance of supply.

The apartments, on the 32nd through 38th floors of the West 57th Street skyscraper, will be listed for sale as condominiums at prices starting at $3.45 million, Extell said in a statement on Monday. The builder has concluded that the market for condos in that range, toward the lower end of what's considered luxury, is better than the one for high-end rentals.

"We recognize the demand for efficiently sized, luxury inventory below $10 million,"  Gary Barnett, president of Extell, said in the statement. "There is absolutely no comparable product currently on the market."

Luxury rentals are proliferating in Manhattan as buyers of pricey condos, in many cases out-of-town investors, take possession of their apartments then quickly list them for lease. The added supply is pushing down rents for the most-expensive units. The median monthly rent for a Manhattan luxury apartment—the top 10 percent of the market—fell 3.5% in March from a year earlier to $8,228, appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate said in a report last week.

"I would be under the assumption that they had no traction on the luxury-rental tack," Jonathan Miller, president of Miller Samuel said of Extell's plan. "The weakest segment of the rental market is luxury rentals."

Extell, which initially planned to reserve the lower floors of the 1,004-foot tower for rentals, tried marketing units for lease on the 37th floor last May, according to listings website StreetEasy. Prices ranged from $13,350 a month for a one-bedroom apartment with 1,021 square feet to $50,366 a month for a three-bedroom home.

Extell had also sought to sell all 38 rental units in a single package to outside investors for $250 million, the Wall Street Journal reported in November.

Fully furnished

The units now listed for sale—the largest of which is a 4,635-square-foot, four-bedroom duplex—will be delivered fully furnished, according to the builder's statement. Seven of the 38 units will be priced at more than $10 million, said Anna LaPorte, a spokeswoman for Extell.

The sale prices will be lower than much of what's already been purchased at One57, where a penthouse that sold for $100.5 million is Manhattan's most expensive completed residential deal. Like residents on the higher floors, buyers of the new units will have access to hotel services from the Park Hyatt New York at the base of the building. Amenities at One57 include a screening room and performance space, on-site parking, an indoor swimming pool and library.

"This is a great opportunity for buyers to have access to the One57 quality, lifestyle and amenities, all at this price point," Barnett said in the statement.

L Train Shutdown Details May Finally Be Coming From MTA

There's still a lot that we don't know about the possible shutdown of the L train. What we doknow is that it may be necessary to facilitate repairs to Superstorm Sandy-damaged equipment in its tunnels, and that it could be happening as soon as 2017, but the MTA hasn't exactly been forthcoming with details beyond that.

But some clarity on the situation may finally be coming. According to DNAInfo, state assemblyman Joseph Lentol (who represents L train-adjacent neighborhoods like Bushwick and Williamsburg), confirmed that the MTA agreed to brief community residents on the forthcoming repairs. "We are working with the MTA to secure a location for the first town hall in Brooklyn," he told DNAInfo, stating that it could happen as soon as the first week in May.

Per the report, the MTA may be asking for community feedback and recommendations on the impending shutdown. Considering how many people could be affected by this action—Brooklyn and Manhattan residents, business owners, developers, the list goes on—we're guessing it'll be a fairly heated event.

Michael Bloomberg Closer to Realizing UES Megamansion Dream

For the past couple of decades, former New York City mayor Michael Bloomberg has been oh-so-casually buying up the units at 19 East 79th Street, the Beaux Arts townhouse that sits next to his current palatial residence at 17 East 79th Street. The five-story building has six units, and as of now, Bloomberg owns five of them. According to the New York Observer, he snapped up unit three for $14 million, which just leaves one holdout in the building.

What he'll do with those apartments—or, for that matter, the building—is anyone's guess, though an enormous megamansion seems very likely. Bloomberg isn't the only ultra-wealthy mogulembracing the Frankenhome trend lately; Madonna is the most famous person to build one, but Russian billionaire Roman Abramovich has been trying to make his own enormous multi-house compound—though the Landmarks Preservation Commission hasn't been enthusiastic about his plan.

Manhattan Rents Are Actually Dropping

Yes, you read that headline right—according to the latest batch of rental market reports, Manhattan rents dropped ever-so-slightly for the first time since 2014. And we say ever-so-slightly, we mean it: According to the Elliman market reports, the average rent decreased one percent from February, and three percent from the same time last year; meanwhile, the median rent dropped about two percent from February, and nearly three percent from the same time last year. "The rate of growth has been falling since August," explains Jonathan Miller, who prepares the Elliman market reports.

The stability is also backed up by the Citi Habitats report, which states that "average rents in March 2016 remained largely unchanged from February." But Citi Habitats notes that year-over-year, "rents for one-bedroom apartments increased the most, with a 4.5% rise. Meanwhile, rents for studio units rose 2.6%, while pricing was up 2.1% and 2.4% for two- and three-bedroom homes respectively."

Additionally, both real-estate groups found that the number of concessions landlords are offering in Manhattan has risen—according to Citi Habitats, to the highest level since 2010. But since landlords are offering more perks like a month of free rent, that means fewer people are leaving their apartments; the vacancy rate also dropped from the same time last month.

So there's some good news, but it's maybe not time to get too excited. "I’m skeptical it will continue since the market sits in a robust local economy," Miller says. "I see it moving sideways for a little while—bumping up and down a bit but showing stability overall." Plus, per Miller, "rent growth remains strongest in lower half of the market and softest at the top"—so apartments that are nominally affordable aren't getting any cheaper.

Especially if you're looking in Brooklyn, where rental prices actually rose both month-over-month and year-over-year. The gap between Manhattan and Brooklyn median rents is officially only $525, and the median rent in Brooklyn rose to about $2,775. And in northwest Queens (which is the only area Elliman tracks in the borough), prices also decreased—median rents by about five percent, and average rents by about three percent. Landlord concessions are also up in both boroughs.

And still, this doesn't mean that things are affordable by any means—the average and median rents are still well above $2,500 in all three boroughs. But the terrifying ascent of the past few years may finally be over.

Prices chopped for over 30% of NYC penthouses

So this is what a “penthouse correction” looks like?

Of the 261 penthouse units for sale in Manhattan as of April 1, more than 35 percent of them had price chops since being listed, according to data compiled by listings portal StreetEasy at The Real Deal’s request. The median penthouse price was $6.7 million, and the average discount was nearly 10 percent, the analysis found.

The steepest cut was at Walker Tower, where the 5,995-square foot penthouse is now asking $55 million, down from $70 million, a 21.4 percent reduction.

At 165 Perry Street, a $25.5 million penthouse had $14.3 million chopped off the original asking price of $39.8 million. And at 12 East 13th Street, the 5,704-square-foot penthouse is now asking $19.55 million, an $11 million drop from the original price of $30.5 million.

“What we have in New York City right now is a ‘penthouse correction,’” CNBC’s Robert Frank said during a television segment last month. “All these developers chased the very top end of the market because it was so lucrative…. And that’s the area – particularly in Midtown – where we’re going to see dramatic decreases in price.”

The recent cuts shouldn’t be a total surprise, given the growing sense that Manhattan’s ultra-luxury residential market is saturated and experiencing a slowdown amid global economic uncertainty. “There’s too much luxury inventory in a crowded neighborhood,” said Douglas Elliman’s Frances Katzen.

The overall market dynamic has also shifted in buyers’ favor, particularly on the high end. “Sellers have to find themselves a way to become more flexible,” said Brown Harris Stevens’ Kathy Sloane. “It’s a buyers’ market and buyers are saying, ‘Fine, we won’t bid.’”

In addition to StreetEasy’s list, other cuts include the penthouse unit at 11 North Moore, where the price dropped from $40 million to $29.995 million last fall.

Meanwhile, Madison Equities and Property Markets Group just split the $45 million triplex penthouse at 10 Sullivan into two units, one asking $11 million and the other asking $29.5 million. “We thought it was too expensive for the market and where the market was,” PMG’s Kevin Maloney told Bloomberg in February.

In November, CIM Group and Macklowe Properties took the same approach for full-floor units on five floors of 432 Park Avenue.

Not every penthouse is seeing a price reduction. “But there are penthouses that may have been priced way beyond the marketplace,” said Steve Kliegerman, president of Halstead Property Development Marketing

For many of the developers, the profits are sitting in the penthouse and they’ll be patient, Kliegerman added. “Sometimes penthouses don’t reflect the marketplace because the developer has a different motivation,” he said. “Hopefully, they’ve already paid off their loans, so now they’re looking to maximize their profits.”

Sloane pointed out that unlike the resale market, new condo developers are reluctant to drop prices. At Zeckendorf Development’s 520 Park Avenue, Sloane – who is not involved in the project – speculated that the developers wouldn’t lower the penthouse price of $130 million but may still accept an offer of $100 million or $110 million.

Elliman’s Raphael De Niro, speaking with Frank on the CNBC segment, likened New York City real estate to an “eight-lane superhighway.”

“There’s a lot of traffic coming and going in both directions and occasionally things slow down,” he said.

World's Largest Starbucks Coming to Chelsea

Being that Starbucks is the number one thing New York City needs more of, the chain announced this morning that it has plans to open a new roastery in Chelsea in 2018 (h/t DNAinfo). This is no ordinary roastery. The shop will anchor the new office building designed by 432 Park Avenuearchitect Rafael Viñoly at 61 Ninth Avenue, the former site of Prince Lumber. At 20,000 square feet, it'll be the largest Starbucks in the world, Fortune says. To put that into context, that means the Starbucks will be about the same size as a Barnes & Noble.

The new shop will follow the same model as the company's roastery in Seattle, the birthplace of the chain, meaning that it won't only be a place for computer campers, bathroom-seekers, and unrooted coffee snobbery. It will also be a place to learn about the craft of roasting and brewing coffee, Fortune says. The new store will go by the name The Starbucks Reserve Roastery and Tasting Room and will open in 2018.

Viñoly's nine-story office building is set to be complete in 2017, according to new estimates.

In 1927, NYC Almost Got a 16-Mile Highway Along Building Rooftops

In the early 20th century, engineers and architects were certainly thinking outside the box when it came to city planning here in New York. There was the proposal to fill in the Hudson River for traffic and housing, the idea to create a giant conveyor belt to carry people between Grand Central and Times Square, and the plan tostack the city like a layered cake. Though these ideas sound whacky, they were born from the rise of the automobile and suburbinization. With many Americans moving out of urban centers, planners sought new ways to reimagine the modern city and entice car-loving prospects.

Another such idea is this 1927 one for a 16-mile elevated highway that would have traveled across building rooftops from the Battery all the way to Yonkers. Conceived by engineer John K. Hencken, it required all buildings to be uniform at 12 stories. Within them would have been standard uses — residences, offices, schools, theaters, restaurants — and elevators to take cars from the street to the skyway.

Sure it’s crazy and was never built, but at the time, Hencken’s proposal was “approved by a number of eminent engineers and city planners. They say it is entirely feasible from an engineering standpoint,” according to a Popular Science article in which it was featured. The article continued: “Our artist pictures here an ingenious new plan for solving NYC’s traffic problems by a remarkable system of roof-top boulevards running more than sixteen miles in a straight line through the heart of the city. Bridging of cross streets for free movement of traffic; moving platforms for speedy and convenient service; healthful elevated playgrounds for children; underground railway freight service—these are some of its outstanding features.”

March’s 10 Most-Read Stories

100 Varick could become first NYC development funded (almost) entirely from China

Renzo Piano-designed 100 Varick Street could become the first major New York development to get debt, equity and mezzanine financing all from China. The developers’ turn to China comes as U.S. lenders increasingly shy away from funding luxury condo development.

Bizzi & Partners Development, Halpern Real Estate Ventures and Aronov Development are raising EB-5 funds for their 115-unit, 320,000 square-foot luxury condo development in Soho, according to a press release from the leading Chinese EB-5 placement agency, Wailian Overseas Consulting Group. The developers already secured a $320 million construction loan from Bank of China and a $135 million equity investment from Cindat, the U.S. subsidiary Chinese investment firm Cinda Asset Management, as Crain’s reported in January.

It wasn’t immediately clear how much money the developers are raising through the EB-5 program, which offers foreigners U.S. visa in return for investments. Bizzi & Partners declined to comment, while Halpern and Aronov did not respond to requests for comment.

EB-5 investors typically provide mezzanine financing. If Bizzi and its partners manage to raise the funds, 100 Varick would become the first major New York development to get all three major layers of the capital stack – debt, mezzanine and equity – from Chinese sources. Presumably Bizzi, Aronov and Halpern hold equity stakes in the project, meaning it still won’t be entirely Chinese-funded.

Other projects have come close. Vornado Realty Trust secured senior and mezzanine financing for its luxury development at 220 Central Park South from Bank of China, but not equity. Meanwhile, Chinese developers in New York tend to mix in domestic financing. For example Xinyuan Real Estate secured a $165 million construction loan from U.S.-based Fortress Investment Group for its Oosten condo development at 429 Kent Avenue in Williamsburg.

As The Real Deal recently reported, domestic lenders are increasingly shying away from financing luxury developments amid slowing condo sales and global capital markets turbulence.

“Everyone’s a little worried,” Michael Stoler, a managing director at investment firm Madison Realty Capital, told TRD in February. “With anything at $2,500 (per square foot) or more, lenders are very cautious.”

Plans for Karim Rashid's Futuristic Soho Building Have Been Filed

Last summer, provocative designer Karim Rashid held a contest on his Facebook page, letting fans vote on the design of his forthcoming NYC building at 30 Thompson Street. Now, nearly a year after the contest was opened, 6sqft reports that plans for the building have been filed with the city's Department of Buildings.

Here's what we know about it so far: The building will rise about 113 feet, and will have eight apartments over as many floors, in addition to a lobby and off-street parking. According to YIMBY, the apartments themselves (each of which will occupy a full floor) could average as large as 1,700 square feet.

As for the look of the building itself, 6sqft reports that this trippy design was the fan favorite, winning the contest that Rashid had opened up on his Facebook page. True to form for the designer, it's slightly futuristic, with a white exterior and geometric windows overlooking the street.

Ceiling heights are movin’ on up in NYC

Design styles fall in and out of fashion. And just as skirt hems tend to rise, so do ceiling heights.

“Today, 11-foot ceilings are the new eight-foot ceilings,” said Izak Senbahar, the president of the Alexico Group, a developer behind the TriBeCa condo tower 56 Leonard.

One of the luxuries of building a new development is being able to incorporate features that cannot be made by simple renovations in existing buildings. Taking this into account, developers are starting to construct their tony new developments to include ceilings that are higher than the current norm — some from a whopping 11 feet to a sky-high 19 feet.

While creating these expansive spaces is far more costly–  both in construction costs and also in lessening the number of floors — it also distinguishes the building from the competition.

The New York Times reports Arthur Zeckendorf, a principal of Zeckendorf Development, estimated that placing 11-foot ceilings in the 33 units at 520 Park Avenue was adding an extra 10 percent to his building costs, and adding 10 percent more time to the construction schedule for the 54-story structure.

But there is a pay-off. buyers will often opt to pay more for spaces with higher ceiling heights because they offer more comprehensive views and better display areas for art collections, not to mention eliminating any feeling of claustrophobia.

Ashwin Y. Verma, a founder of Siras Development — which is building Soori High Line where 80 percent of the 31 condo units will have 13-to-18-foot ceilings — says new construction will incorporate higher ceiling heights from now on.

“As a developer, the New York market is one of the few places where you can change the story on architecture like this and still get rewarded,” he explains.

It’s baaack: City Council proposes new “mansion tax”

f at first you don’t succeed in bilking brokers of their hard-earned income, try try again. The City Council is bringing back Mayor Bill de Blasio’s once-defeated “mansion tax” proposal.

The Council included a potential new tax on high-value residential property deals in its response to the mayor’s 2017 budget proposal.

Under the plans, apartment buys over $1.75 million would be taxed at 1 percent, and those worth over $5 million at 1.5 percent. The Council also proposed a new tax on carried interest, the method by which many private equity managers are compensation, the New York Daily News reported.

All told, the lawmakers estimated the taxes would bring in around $410 million next year. The Council earmarked those funds for social programs for immigrants, women and youth. In total, the suggested budget calls for $790 million in new spending.

The city already collects a mansion tax of 2.825 percent. The Council’s proposed rates are the same as those pitched by de Blasio last year.

That measure was defeated by Albany lawmakers last year. The new proposal would similarly require approval at the state level. [WSJ] – Ariel Stulberg

Another sign the luxury condo market is cooling

The median price reached $1.1 million, up 17% from the same time a year earlier, but that figure is inflated

The median price reached $1.1 million, up 17% from the same time a year earlier, but that figure is inflated

The overall market for Manhattan homes remained strong during the first quarter of this year despite the luxury segment cooling off, according to a number of reports released Friday.

However, the $1.1 million median price reported by Douglas Elliman Real Estate—up 17% from the same time a year earlier and the second-highest on record—was artificially inflated by a slew of new development contracts closing during the first three months of the year. Those deals, which also pushed the average price to new heights, were likely inked more than 12 months earlier.

"I think of the market as three broad areas all performing in different ways," said Jonathan Miller, whose appraisal firm, Miller Samuel, prepared the report for Douglas Elliman. "And the further down in price you go, the more intense the demand is."

The luxury portion of the market, which Miller considers the top 10% of all sales based on price, has slowed by many accounts. Despite a number of new projects coming online in the past year, the number of sales increased by a mere 8%, while the number of units on the market fell as developers of new buildings opted to keep homes off the market.

The trend was even starker for apartments in newly constructed buildings, many of which also fall into the luxury category. Even though developers built an estimated 5,500 units in 2015, there were fewer units being marketed in the first quarter of 2016 compared to a year ago. That decline in active listings, which fell by 44%, was largely due to sellers keeping new units off of the market in response to the sluggish pace of contract signings in recent quarters, according to Miller.

The median price for new developments jumped by more than 60% compared to a year earlier, but this was more of a reflection of the market at the time the contracts were signed during headier days in late 2014 and early 2015. Now it's a different story. 

"I think on the higher end, buyers are balking a bit on the pricing and looking for deals," said Pamela Liebman, chief executive of the Corcoran Group, which also released a report Friday. "Prices have been going up for so many quarters in a row it is not unusual for them to take a breath."

But the opposite was true in the resale market, which makes up more than three-quarters of all transactions in New York City. There, buyers quickly snapped up lower priced units. In fact, the largest share of sales during the first quarter were for homes priced between $500,000 and $1 million, according to Corcoran.

And inventory increased by double digits as more owners opted to cash in on what the Douglas Elliman report showed was steady price growth: The median price for resales reached $950,000 at the end of the first quarter, a 7.3% increase compared to a year before.  

Going forward, real estate experts believe the lower-end and resale markets will remain strong. But developers at the high end of the market need to be willing to price their apartments appropriately in order to move units. 

"The real sellers have made adjustments to what was unrealistic pricing," said Andrew Heiberger, chief executive at brokerage firm Town Residential, who said that more developers will likely begin following suit for homes that have sat on the market.

City Hall Quietly Eyes Neighborhoods for New Jails to Replace Rikers Island

NEW YORK CITY — City Hall officials are quietly exploring a proposal to move inmates off Rikers Island and into renovated borough detention centers and two new jails in city neighborhoods, DNAinfo New York has learned.

The move runs counter to public statements made by Mayor Bill de Blasio last month where he called plans to shut down the city's controversial central jail a "noble concept" that was unworkable because it would "cost many billions" to do.

"In the end, you still are going to need facilities," he said. "Where are you going to put them?"

But city officials have identified possible locations on Staten Island, The Bronx, Brooklyn and Queens where two new jails — each housing as many as 2,000 inmates — could be built.

Space next to the NYPD’s newly opened police academy in College Point is one possible location, according to sources.

Another location is in Hunt’s Point on land next to where an 800-inmate jail barge is moored. The barge, known as the Vernon C. Bain Center, would also be shuttered under the plan, sources said.

City officials, who have been studying the idea of a Rikers shutdown for more than a year, have also identified two locations in Brooklyn as possible jail sites, sources said.

The plan could cost as much as $7 billion and would take over a decade to build the new facilities and perform renovations, sources said. In all the entire phase out of Rikers could take 30 years.

Rikers Island’s inmate population hovers around 10,000, but de Blasio has set a goal of reducing the size by a quarter.

Under the Rikers shutdown proposal, the two new jails and rehabbed correctional facilities would hold roughly 7,500 inmates, de Blasio’s target population.  

De Blasio spokeswoman Monica Klein said the mayor believes there are "many significant challenges" that must be addressed before Rikers could be closed.

"For years, an environment of violence, abuse and neglect has been tolerated at Rikers," she continued. "The situation is unacceptable and must change now, not another decade from now."

She added that the administration is "putting into place serious reforms, which are reducing violence in targeted areas and keeping the population down. Closing Rikers does not close the jail system, and we need to fix what's inside these buildings — wherever we put them."

'THEY'RE TERRIFIED'

Sources said City Hall officials see the $7 billion cost as an extremely rosy estimate, but perhaps the biggest obstacle to the proposal is the Uniform Land Use Review Procedure, or ULURP.

“They’re terrified of it,” one source said of the public vetting process on how land-use changes would affect their neighborhood.

If the city were to build new jails or make major renovations of existing facilities, then the changes must be approved through a years-long multi-tiered process, which includes votes by the affected community boards and the City Council.

City officials fear the resistance would slow the process to a standstill.

"It's daunting, It's big. It's huge money and it's huge political costs," said another source who helped study the issue for City Hall but asked not to be named to protect relationships. "Opening a homeless shelter is difficult. Imagine dropping a 1,500-person jail in someone's neighborhood."

Glenn Martin, a criminal justice reform advocate and founder of JustLeadershipUSA, said expending political capital seems to be one of the biggest obstacles to closing Rikers.

Martin spent six years in prison and has been named to a commission led by the former chief judge of the state, Jonathan Lippman, to examine a Rikers shutdown. 

"We're back to having a very political mayor in office. This is not Mike Bloomberg," Martin said. "The mayor is the main holdout in the growing chorus to close down Rikers."

RESISTANCE ALREADY

And the pushback to building neighborhood jails has already begun — before any ideas have been publicly floated.

After City Council Speaker Melissa Mark-Viverito called for an overhaul of the city’s criminal justice system in her state of the city speech Feb. 11 and announced the formation of the Lippman commission, Councilman Joe Borelli, who represents Staten Island’s South Shore, wrote a letter to the speaker telling her that he doesn’t want a jail in his district. 

His concern was that Mark-Viverito’s commission would identify a possible jail site on a tract of land in Rossville along the Arthur Kill that the city Department of Correction owns.

Borelli said he deduced the site would be considered using common sense but was called "crazy" for suggesting it. Over the years, the city's Economic Development Corporation issued a Request for Expressions of Interest for the 33 acre parcel but nothing ever came of it.

Borelli said another idea was floated of doing a land swap with the owners of the adjacent LNG tanks site where the city would trade the Arthur Kill side of the property in exchange for the backside of both properties and create a park.

The Staten Island Advance reported earlier this month that the owner of LNG tanks site hired an architectural firm to develop plans to turn the space into a "regional factory outlet center" with a fast ferry, movie theater and park.

"Somebody really smart decided we're going to put people who are potentially violent criminals on an island away from society. No one wants a jail next to their house," said Borelli, who called for the current Rikers facilities to be modernized to help reduce violence.

"I have not had one complaint from a constituent that visiting their family at Rikers Island was too far," he continued. "If it is, I really don't care. Putting this in an obscure residential part of Staten Island doesn't necessarily help make this more accessible to potential prisoners' families."

Borelli is right about the Rossville site — city officials identified it as a possible location for a new jail, sources said.

'FAIRER, BETTER AND MORE HUMANE'

Mark-Viverito stood behind the importance of shuttering Rikers.

"For too long, Rikers Island has been emblematic of the deep institutional flaws in our city's jail system. New Yorkers deserve a fairer, better, and more humane system that treats everyone with respect and dignity," Mark-Viverito said in a statement. 

The City Hall plan, which sources say could save more than $500 million annually, includes spending nearly $3 billion to expand or renovate the detention centers in Manhattan, Brooklyn and Queens.

The Manhattan center would house women, according to sources. 

And there are already blueprints for an expanded Brooklyn Detention Center, which had been closed for a decade when it reopened in 2012 with a limited population.

In 2010 Ricci Greene Associates and 1100 Architects created a design for an expanded, state-of-the-art Brooklyn Detention Center for the city’s Department of Correction. 

During the Bloomberg administration, then-Commissioner Martin Horn had envisioned reestablishing a community-based jail system where inmates were closer to their families, their attorneys and the courts.

“In Marty’s view, housing all the inmates on Rikers was not the most efficient policy,” said David Burney, who, at the time, was the Department of Design and Construction commissioner and was tasked with overseeing the redesign. “His idea was that what we should really be doing is putting the detention housing next to the courts.”

Burney said moving inmates closer to the courts was more sustainable and would have cut down on the costs of bussing inmates to and from Rikers.

The design would have more than doubled the number of inmate beds at the Brooklyn center to nearly 1,500 from 600.

But the center, which runs along Atlantic Avenue between Boerum Place and Smith Street, was never renovated because of neighborhood opposition. Horn also resigned as commissioner in 2009 before the Ricci Greene-1100 Architects study was completed.

His successor, Dora Schriro, opted against a community-based jail system and instead planned a new $600 million admissions facility at Rikers, which has yet to be built.

“We had done the design. It was ready to go,” Burney said. “But Marty Horn left. Dora came in. Her philosophy was different.”

The source who studied closing Rikers for City Hall said he didn't understand why de Blasio would nottake smaller steps as part of a compromise.

"Politically, it was disastrous not to say well, we can't move everybody but dammit we're going to move the juveniles," the source said. "You can take off a couple of other populations, the women's population, the mentally ill. You could maybe come to some place in between."