The long-stalled City Point Tower project became the city’s first commercial development green-lighted for a cash infusion of federal stimulus money.
Under the plan, developers of the project at the old Albee Square Mall site, where DeKalb Avenue meets the Fulton Mall just west of Junior’s Restaurant, will be able to use $20 million in tax-exempt bonds through the federal stimulus bond program established by President Obama.
The Board of the New York City Capital Resource Corporation (NYCCRC) gave preliminary approval for the allocation with the final approval expected to come after the developer, Albee Development LLC, submits final plans around January 2010.
“These are exactly the types of projects the American Recovery and Reinvestment Act is intended to assist,” said NYCCRC Chairman Seth W. Pinsky. “In each case, important large-scale projects, stalled by the current economic downturn and lack of conventional financing, will be immediately jump-started to create much-needed construction jobs and revenue for the city.”
Pinsky said that the city will initially lose about $500,000 in foregone income tax revenue, but expects to gain over $22 million in ongoing revenue.
The tax exempt bonds will only cover the retail first phase of the mixed retail space/residential project, which is expectedto create 328 construction jobs and 108 permanent jobs.
This first phases includes a 184,000-square-foot retail space, which is scheduled to break ground early next year.
The 210,000-square-foot residential second phase, which the developer has to finance separately, will include 262 units of housing with 120 set aside for moderate- and low-income residents.
The city-owned vacant site, formerly the Albee Square Mall, is bounded by where Dekalb Avenue meets the Fulton Street Mall and extends north to where Willoughby Street meets Flatbush Avenue.
The city has been in negotiations with the new ownership Albee Development LLC, a consortium of PA Associates/Acadia Realty Trust/McFarlane Realty, since the group purchased the long-term lease for the land from developer Joe Sitt for a reported $125 million in 2007.
In the complicated three-way deal, the city’s Economic Development Corporation (EDC) worked out a separate contract with the new lessee that involved development and transferring ownership over a period of time.
When the project was first announced, the developer released renderings that would have included a tower as tall as 65 stories. However, with the downturn in the economy, financing for the project dried up.
Albee Development spokesperson Tom Montvel-Cohen said the company is currently in the serious design phase and ground will be broken early next year.
“We’re very gratified on the approval of financing and look forward to continue work toward the groundbreaking,” he said.
