This post is the second installment in a 3 part series, with the first title Whose Responsible for the Urban Blight at 1576 Fulton Street
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Over the last 10 years we’ve seen New York City politicians align their political futures with well financed real estate developers.
Tishman Speyers, Larry Silverstein, Kent Swig, Aby Rosen and other Real Estate titans have wielded great power and influence in New York City politics.
However, none of those mentioned will come close to the reach and wealth that a recent entrant into the real estate landscape possess.
Goldman Sachs is a venerable financial institution, with a storied past that mirrors the history of Wall Street in the 20th century. It is the premiere Investment Bank in the United States, and finds itself with few peers after the demise of Bear Sterns and Lehman Brothers.
In the last 25 years, many of the firms executives have held or currently hold high public office, which is further evidence of it’s influence on a national and global scale. (see Henry Paulson, John Corzine, William C. Dudley, Robert Rubin)
With a client list that reads the who’s who among the Forbes 400 wealthiest Americans and Fortune 500 CEO’s, Goldman Sachs has a cadre of investment analysts committed to identifying undervalued opportunities.
And recently, they’ve been hard at work evaluating opportunities available under a specific investment criteria.
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Goldman Sachs Urban Investment Group is part of the Merchant Banking Division of Goldman Sachs Inc., whose investment objective is stated in a press release dated December 13, 2007;
It invests the firm’s capital in real estate projects and operators in emerging or transitional urban areas.
After reading this, I wanted to learn more about Goldman Sachs interest in real estate and unearthed the following information from their Urban Investments web site;
The Goldman Sachs Urban Investment Group is the primary vehicle through which Goldman Sachs provides long-term capital for both corporations operated or owned by ethnic minorities and real estate developers targeting urban communities.
Reading further, I came upon the opportunity identified by the Urban Investment Group for realizing a significant return on investment of the firm’s capital;
Strong demand for urban living continues to be fueled by growth in immigrant populations and the relocation of “baby boomers” and suburbanites back into dense and ethnically diverse urban areas
Unless anyone reading has any insight into what is meant in the above statement, it is subject to broad interpretation. However, it appears the Urban Investment Group isn’t waiting for anyone to interpret their intentions, as it appears they’re open for business in New York under the following entity.
The above represents the corporate filing for GS UDC PARTNERS MEMBER LLC, a foreign Limited Liability Company whose domestic registration exists in Delaware (a common business registration strategy for risk management purposes by large corporations).
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You can visit the Delaware Department of State Entity Search and enter their filing registration number 4439295 to examine their corporate filing.
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As you’ll see below, it appears that the GS UDC PARTNERS MEMBER LLC have taken an interest in the part of Fulton Street where 1576 Fulton Street stands, having purchased quite a number of vacant lots and properties recently;
GS UDC PARTNERS LLC are the proud owners of the following property parcels that are located in Bedford Stuyvesant, Brooklyn:
- 1562 Fulton Street – Vacant Land
- 1564 Fulton Street – Vacant Land
- 1566 Fulton Street – Vacant Land
- 1596 Fulton Street – Vacant Land
- 1604 Fulton Street – Vacant Land
The purchase of the above properties were closed on November 30th 2007 for $9,705,000.
The only questions left to ask is, who are the “Suburbanites” and “Baby Boomers” eager to return to the inner city’s densely ethnic neighborhoods?
As you’ll begin to see in our final post in this series, local politics are involved in arranging real estate deals under the guise of community development in the outer boroughs of New York City.
Since it appears that a deal has been in the works for Goldman Sachs’ GS UDC PARTNERS MEMBER LLC, why haven’t you been informed about this in the latest newsletter sent by Community Board #3, Councilman Al Vann or Brooklyn Borough President Marty Markowitz.
The above links are provided for you to send an email inquiring about the plans for Fulton Street between Albany Avenue and Marcus Garvey Boulevard.
Our series continues at Property and Politics: NYC’s Unlicensed Real Estate Agents, the final post in this 3 part series.
{ 6 comments }
Freaking excellent article, Michael! Love the investigative work.
I couldn’t find the part about the relocating suburbanites and baby boomers in the UIG materials, but the point that you make is well taken. Relocation for some, will be displacement of others. Which undermines what Goldman, through the presentations on the UIG website, states are two of their goals – having urban entrepreneurs stay in their communities and community “revitalization.”
On the otherhand, who else can bring these types of resources to bear on our communities? As the presentation states, there are market inefficiencies and these communities are, as we know, underserved.
I’m curious what the role of local politicos is in arranging what, on the surface, just looks like a regular real estate portfolio transaction. I’m reserving judgment on the politicos until I see your final piece. CAN’T WAIT.
I’m hoping it stimulates dialogue amongst the residents in the 36th NYC Council District and to begin asking some tough questions about their political representation.
While I’m trying to get the attention of the “Obama Voter”, I’m attempting to desperately ask our seniors, who vote in great numbers (and who also understand the price that was paid for that right) to consider the incumbent and the candidates and to NOT make the subtle “retail” vote…using only name recognition as their criteria.
This and many other issues lag in advocacy by our locally elected officials due to their perception of the apathy of their constituents.
Maybe this will invigorate the incumbents, as we’re making our work available to the traditional press (both print and electronic) as well as the blogosphere.
FYI – we made your piece the “Lede” post for today. In the spirit of generating discussion, though, we play devil’s advocate and explore the benefits of PE investments in the community.
Out of curiosity – who did Goldman purchase the Bed Stuy properties from? I wonder why they did not try to purchase 1576.
It’s such a shame about the name recognition thing.
Where Vann’s name really counts and can really do the most good for BS/CH is in the halls of city government. I’m sure he has amassed a lot of political clout and respect over the years and would have a lot easier time than some of the new challengers, at advocating on our behalf.
In terms of reaching the seniors – I am with you, Michael! I really do hope that your series gets picked up by the traditional media. It is an awesome series. Maybe you can reach out to Errol Louis of the Daily News.
Laurel,
The reasons are not as obvious as most people think, but will be more clear in the next post, as I’ll examine the many tools available that the city has to warehouse properties from the market.
I do know that one of the lots was purchased from a person name Wentz.
I’ve taken your advice and I’m going to circulate it around to the media to see if anyone with better resources and press credentials can do a better job of reporting what is clearly a story that needs the full inspection of the community.
If the properties they purchased are vacant land, how is anyone getting displaced? I actually don’t think they are vacant unless they’ve been recently demo’d, the listing you show has them as small mixed use properties. However, as you pointed out in another post on 7/28 this stretch is full of vacant properties in disrepair.
I don’t think their goal is to relocated anyone, they are simply saying that there is a trend of people moving from the suburbs back to cities. This is something that has been written about many times recently. Many from the baby boomer generation moved out to the suburbs 20-30 years ago to raise families, they are now “empty nesters” and are looking to downsize and be closer to the services that a city offers. Goldman is aware of this trend and wants to take advantage of it as they see increased demand for housing in the city.
Buying vacant lots, presumably with the intent to build housing on them, is only going to increase the supply of housing in the area, not displace current residents.
I guess you can start making assumptions about what type of housing will be developed and what impact this will have on gentrifying the area, etc. etc. but you know what happens when you assume… Without any concrete plan that has been proposed it’s difficult to point fingers.
You also state that it appears that a deal has been in the works between Goldman and local politicians under the guise of community development but I don’t see anything supporting this. Perhaps they just decided to buy some land because it’s a good investment. Do you have any more info on this deal you mention? Maybe there’s something you’re leaving out that will appear in your next story.
Last point, the properties purchased were bought just after the city approved a rezoning of this area, these properties are all now zoned R7D which has an inclusionary housing program granting the developer additional development rights in exchange for developing affordable housing. So there is a strong chance that the goal of this purchase is to build affordable housing.
I think that stretch of Fulton can use some revitalization, the rezoning was meant to do just that and having some real funding coming in from a major corporation like Goldman is great for the community.
Hi Ben,
If you visit Google maps and enter the addresses into the address field, you’ll notice that each view will show an empty lot. They’re at the east side of 1576 Fulton Street.
What has been true in the “migration to urban centers” trend is the age group more likely to locate to these communities are 24 to 40 (not the likely demographic that’s finished raising children).
The majority of folks in the category you’ve mentioned are retirees, looking for a slower pace, which I can assure you won’t be found there.
I’m not accustomed to pointing fingers and assigning blame. However, it would be difficult to refute the responsibility of the parties mentioned in the 1st installment, as the construct for local representation is prescribed in the city charter.
Now, if 10 years went by, then fine. Maybe even 20. But as I mentioned, for most of my life, this has appeared in the photos as you’ve seen to this very day.
And it would be naive to believe that Goldman Sachs Urban Investment Group would invest the firm’s capital in a real estate venture if they didn’t have some level of assurance by those who can directly (and indirectly) influence the process. (nothing is done by happenstance where $9,705,000 is made as a down payment on a long shot, would it?).
Final City Council approval for the rezoning of the now title Fulton Street Commercial Corridor just recently passed in 2009. Examining the last 20 years of the City Council’s land use committee activities and you’ll see that projects like Atlantic Yards have their start long before it reaches even the committee level
(as you’ll note, the city charter outlines the construct of how things gain momentum when they begin at the Community Board level)
Any idea how long they’ve been planning to make that stretch of abandoned train tracks Manhattan into a Park and the money influence that got the attention of local politicians to finally support the effort…learn more at this link http://www.nydailynews.com/ny_local/galleries/green_mile_high_line_park_opens_in_manhattan/green_mile_high_line_park_opens_in_manhattan.html)
Revitalization is definitely the prescription needed for this location on Fulton Street. But it didn’t have to take 30 years to at least begin the process.
Ben, I hope you’re aware that even with Goldman Sachs $9,705,000 down payment on this opportunity, it shouldn’t be assumed that you’ll be watching a groundbreaking ceremony as early as 2010. These things usually take years to even get the initial construction phase going (It took the Downtown Metrotech project 10 years before they even put a shovel into the ground after winning approval by the land use committee in the City Council)
I believe readers like yourself are anxious for anything resembling progress in this community. But we should be forewarned that what is reported rarely ends up being as planned.
You’ll see in the next installment.
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