Manhattan real estate currently sells at an average cost of $1,697 per square foot. That values a 1,000 square-foot condo at just shy of $1.7 million.
It’s a wonder, then, that close to 2 million square feet of land sat empty for 50 years along Delancey Street in the heart of Manhattan’s Lower East Side.
Developers had grand visions of urban renewal when the city tore down the existing tenement apartments there in the late 1960s, but those plans were deferred and delayed due to ethnic divisions and political forces that opposed the development of low-income housing in the area.
And even though nearly 1,800 working-class families lost their homes — all with the promise that they could return when the new buildings were completed — the project never materialized.
The locations sat empty, for decades, being used mostly as parking lots.
Change finally came in 2013, when the city took a ground-up development approach that put the decision-making — and compromising — in the hands of the previously divided factions of the community.
What came of the consensus was a real estate project now known as Essex Crossing. The plans for the project included requirements for cultural and entertainment attractions, health care facilities, office space, parks, retail, and mixed-income housing that wouldn’t price out the neighborhood’s low-income residents.
“Across the nine building sites that make up Essex Crossing, you end up with one of the largest public-private partnerships in the history of New York,” said Isaac Henderson, Essex Crossing’s project manager and a director at L&M Partners, one of three building companies working together as Delancey Street Associates to oversee the massive real estate project.
“The development really has a little bit of everything. It has 1,000 homes — including 500 that are categorized as affordable housing — along with more than 350,000 square feet of office space, and a number of larger, community-focused facilities, including a supermarket, a bowling alley, a movie theater, and an urgent care clinic,” he noted.
Answering the challenge
A project this large comes at a price, and for Essex Crossing that price is $1.5 billion. But with part of that cost associated with affordable residential construction and another tied to affordable commercial development, finding a financial company that could handle both was a challenge for Delancey Street Associates.
They took the project to Wells Fargo, the No. 1 investor in affordable, multifamily housing in the U.S.
Henderson’s team worked with Liz Oakley and Wells Fargo’s Community Lending and Investment division to explore the financial resources available to developers of affordable senior housing and affordable commercial space — specifically, low-income housing tax credits and new markets tax credits.
“These tax credit programs help stimulate and develop affordable housing,” said Oakley. “They allow developers to raise capital by selling these credits to investors like Wells Fargo, which reduces the debt that the developer would otherwise have to borrow.
“Essex Crossing is a wonderful example of a mixed-income, mixed-use housing and community facility that includes office space, cultural space, and retail space,” added Oakley. “It’s important to see the reactivation of these sites that have sat pretty much vacant for 50 years; it really is like witnessing the construction of a new community.”
The ‘Goldin’ rule
Today, six of Essex Crossing’s nine building sites are under construction or have been completed, including a 14-story, 100-unit apartment building for affordable senior housing named after Frances Goldin, a longtime community activist on the Lower East Side.
The honor recognizes Goldin’s decades-long fight for her neighbors, pushing the city to ensure that whatever was finally built on Delancey Street included affordable options for local residents.
“I was a housing activist from the time I moved to the area, and part of being a housing activist was to preserve affordable housing,” said Goldin, who is now 93. “We did whatever we could to do just that, and it frequently put us into conflict with the city. But we fought back and we didn’t let them get away with all of the crap they were doing to those poor tenants who lived in the buildings they tore down.”
Now, as the cost of living in Manhattan continues to hit all-time highs, Goldin’s impassioned efforts for affordable housing resonate even more.
The proof is in the numbers: For the 312 affordable units made available thus far at Essex Crossing, there have been more than 270,000 applications.
“One of the greatest crises facing New York City is the tremendous demand for housing. So it is critical to the community that the affordable housing options at Essex Crossing cover a broad range of incomes,” Henderson said. “I have a tremendous amount of pride to be involved in this project — it really is a historical project and so many people have invested their time and energy in making it a reality.”