Developer: Financing for Pier Six Towers in Jeopardy Unless State and City Act Soon

The Real Deal reports that developer Robert Levine, of RAL Development Services which, along with Oliver’s Realty Group, plans to build two high rise residential structures near the entrance to Pier Six in Brooklyn Bridge Park, has written a letter to state and city officials urging them to give prompt approval to the project because lenders have indicated that unless there is “substantial progress” concerning the approval of changes to the Park’s General Project Plan to allow the buildings as proposed, financing “will be jeopardized.”

We earlier noted that the board of the Empire State Development Corporation, which has authority over the Park, had indefinitely deferred consideration of the proposed modification to the GPP because of concerns raised by community representatives and elected officials.

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  • CHatter

    Odd, weak move. Telling the world that your financing is about to dry up is like admitting that your project (at least in the eyes of financing sources who do this for a living every day) is not viable.

    Now I realize that whatever bank or insurance company is providing the financing thinks it’s plenty viable, they just don’t want to hold reserves against a funding commitment that is hung up indefinitely in bureaucracy. So let them terminate their commitment, and if the deal is still attractive if/when those hurdles are cleared, it will get financed. If not, then the market has spoken: do not build.

    What this letter amounts to is a plea: “Dear City: I spent $109mm on spec on a ground lease and now I might not realize the ROI that I projected and my investors will be mad at me. Bail me out!”

    I submit that that is not the City’s job.

  • Reggie

    I am sure the RFP requires that a respondent must have financing so the delay potentially makes it impossible for RAL to remain in consideration.

  • CHatter

    Yes, that’s probably true. And the ground lease may have a financing or zoning/approval condition that allows RAL to walk away or put the lease back to the BBPC if the project doesn’t go forward. Again though, not the City’s job to secure RAL’s success. Development deals fall apart all the time, and in cases like this, my humble opinion is that they should fall apart. The project simply does not represent the highest and best use of the parcel.

  • Reggie

    Yeah, but an RFP is a unique type of development deal.

  • gc

    ROI I know. GPP is defined in the article. Can somebody explain what an RFP is?

    Between the developers, and all the lawyers they are able to employ with our money, there is no end to the insanity that is stealing our neighborhood out from under our very eyes!

  • Claude Scales

    RFP s a Request For Proposals. The Brooklyn Bridge Park Corporation issued an RFP for development of the Pier Six sites, and RAL’s proposal was chosen.

  • Solovely

    yes, and RAL was one of 14 respondents to the RFP.

    It was highly competitive… are we worried if RAL walks?

    Pier 6 is a jewel… higher calling as park space, but certainly attractive to developers till the end of time. This is an odd news story.

  • redlola

    Just make it stop. So over this.