The real estate business in New York City has been, to put it mildly, chaotic and unhinged. The daily grind in Brooklyn’s residential market is always challenging in good times and excruciating in bad.
With several difficult real estate deals still in tough negotiations while coordinating contracts with attorneys and directing my sales team’s activities, I’ve had to schedule my blogging activities in the wee hours of the morning for what is becoming a growing audience for MyBrooklynReport.com.
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One evening I was reading an email from a member of one of the Linked In groups I belong to who, after reading some of my more politically toned articles, offered some thoughtful advice to a newcomer to the blogosphere.
Build a firewall between your business and your politics to keep them separate from each other.
I can appreciate the advice offered, especially since my partner and I are working hard 8 days a week, 25 hours a day to build Corley Realty Group into one of New York City’s premiere brokerage agencies. It’s also a familiar truth never to discuss Religion, Race or Politics, as the conversation never ends well.
But how do you avoid the subject of politics in any discussion regarding real estate in this city. Take a look around you. In the last 5 years we’ve seen an enormous amount of luxury condominium development concentrated in Manhattan and Brooklyn.
110 Livingston Street, the former New York City Board of Education headquarters is now a luxury condominium. Even the old Williamsburgh Savings Bank building, also known as One Hanson Place, or affectionately referred to as the clock building, is now a luxury condominium property developed by Magic Johnson’s investment group.
Politics are a factor in all matters pertaining to real estate in New York City. Embracing that fact helps to avoid the negative impression that reality conjures up.
Understanding how the levers of power are pulled and the personnel in charge begins the political maturity necessary to advance an enlightened agenda.
Politicians have always made it known that they are not experts on every issue that come before them. Where their void in knowledge exists there is always someone willing to fill in the gaps, as well as provide beneficial scenarios, what is commonly referred to as spin.
Which is why for every member of Congress there are at least 77 lobbyist performing this “fill in the gap” service for your elected representative. An informed special interest can apply pressure and/or incentives necessary to move their agenda, or in the case of the developer at 1040 East New York Avenue, an important contingency.
So you can imagine the reaction by most New Yorkers when they heard that a real estate developer who just completed a 67 unit luxury condominium development on East New York avenue in Crown Heights, Brooklyn, entered into a 10 year agreement to allow the city to house the homeless at $90 a day, or $2,700 a month per unit Homeless Flock to Brooklyn Luxury Condo in Hopes of Scoring Shelter [NY Daily News].
The developer, who fostered relationships with political officials holding office, Department of Homeless Services, Department of Housing, Preservation and Development and the Bushwick Economic Development Corporation to salvage his business plan. After all, a real estate developer understands the enormous risk associated with building residential units where the demand is unknown for the final product.
Yet, the city saw it wise to lease the units over a 10 year period, as coordinated through the Bushwick Economic Development Corporation, at a rate greater than the current rental subsidy offered for a 3 bedroom rental for anyone receiving Section 8.
(if you recall, I’ve already made my position known regarding local development corporations in Just One More Thought on the Reason Why)
Is it a coincidence that such an arrangement could come together that would financially rescue the poor business decision made by the real estate developer while also providing a solution for housing the city’s growing homeless population without advice and consent from the local Community Board, in addition to providing a local development corporation a new revenue stream for administering the service outside its neighborhood (Bushwick), all during an election year?
(If your a fan of THE WIRE, then you’d know exactly what Clay Davis would be saying at this point….sssshhheeeeeeeiiiiiiiiiiittttttttt!!!!!)
When you calculate the financial benefits, at $2,700 per unit, the developer will be able to breath a sigh of relief and restructure his construction loan into a regular mortgage once his lender learns that he will see a monthly gross income of $180,900 and $2,170,800 annually for ten years, guaranteed.
If I were a resident in that district, I would be eager to ask Councilwoman Darlene Mealy what her position is with respect to 1040 East New York Avenue; could it be an opportunity to create Affordable Home Ownership or believe it makes sense to relocate the homeless population from around the city into luxury accommodations into her district. What do YOU think?
Or wouldn’t it have been better for the city to purchase the property from the developer at a price slightly above cost to offer the individual units to the home buying public in order to add to the working middle class in Crown Heights, Brooklyn?
Real estate is my business and its politics is part of the process. Unfortunately in my line of work, its difficult to separate the two in Brooklyn.
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