A Pathmark supermarket stood a few years ago where an 850-foot glass tower now rises next to the Manhattan Bridge. Workers have installed the I-beams and rebar that will support a $3.53 million condominium that will stand dozens of floors above the Turkish bath and private dog run. The residents who will move into Extell Development’s 815-unit building will enjoy a full slate of living amenities separate from the low-income neighbors who will inhabit a 215-unit building next door. Three more luxury towers are planned to follow the luxury “vertical village” at 250 Street in transforming a collection of rent-regulated and public housing tenants into a minority on their own block.
Rumors had circulated for years that developers were eyeing the area as a cheap place to build in the expensive local real-estate market. Trever Holland, a tenant leader of a building adjacent to the Extell project, said things changed for ever when Extell demolished in 2014 the Pathmark. There was a psychological dimension to the loss of the only supermarket in the area, he said in an interview.
“You went there you saw your neighbors it was a beacon of the neighborhood,” he added.
His neighbors blasted the project at the time for segregating market-rate condo owners — who will receive tax breaks — from the rent-regulated tenants required by the 421-a tax exemption given to the project. A legal loophole at the time allowed Extell to build a separate building as well as the controversial “poor door” at another project on the Upper West Side.
“Perfection is the enemy of achievement,” Extell founder Gary Barnett told residents at a 2014 meeting.
Gov. Andrew Cuomo and New York state lawmakers reached a budget deal last week that resuscitated the controversial 421-a tax exemption.
Barnett and representatives from throughout the real-estate industry advocated for the revival of the 421a tax abatement, now known by the moniker “Affordable New York.” The Real Estate Board of New York — the largest industry lobbyist in the city — was quick to praise the return of the abatement on April 8. “It will result in the production of substantially more affordable rental housing,” reads an April 8 statement.
About $8 billion will shift in the upcoming decade from city tax coffers to developers because of the return of the tax abatement, according to a March report from the city’s Independent Budget Office. About 20,000 of the approximately 73,600 city properties that received the tax break in 2016 are located in Manhattan, according to city records. Some properties would have retained the tax break until the 2040s even if lawmakers had not reached an agreement last week to bring it back.
The revived version of the tax break includes new affordability options imposed in a short-lived 2015 renewal. But such changes might not counter the demographic changes affecting the area around the Extell project as more affluent residents move into the area as one tower after another rises with the benefit of property tax abatements.
The tallest of a pair of towers next door will reach 800 feet. A 60-story tower is coming to an adjacent block. And there’s an 77-story tower going up at 247 Cherry St. just a few yards away from the project that Extell is now marketing as One Manhattan Square. These projects are still in the early stages so understanding the extent to which property tax abatements will fund their construction remains unclear.
“[The neighborhood has) changed to this point where parts of it I don’t recognize,” says Holland.
The area has changed for the better in many ways in the last 15 years, according to Vaylateena Jones. But she says the rise of what will become one of the tallest residential buildings in the city a few doors down from her birthplace evokes a certain level of resentment.
“One of the things that I think is problematic about gentrification is that generally you have people that influx that have a lot more money and other benefits go towards them. The community starts changing towards them,” she says. “I hope there are some benefits for the children here, the teenagers here, for the adults here, for the people that live here now that have made the Lower East Side a diverse place to raise a family.”
Extell reaches to complete its latest big budget project in the Lower East Side—it has promised to replace the supermarket—it has already begun the process to begin demolition on the site of another Pathmark supermarket in Harlem.