With at least eight years left before a set of new rail tunnels under the Hudson River are scheduled to be built and functioning, developer Sam Chang has already begun to reap benefits from the project. That’s because the voracious builder of cookie-cutter hotels bought a $24 million West Side parking lot last November—a lot that just happened to be the same site the Port Authority needs in order to build the more than $7 billion project, called Access to the Region’s Core (ARC).
Since then, the number of developers and landlords buying any city property has fallen off a cliff amid an impossible financing market, and brokers report that the bulk of sales that do happen have noticeably lower prices.
Not in this case. In a deal that popped up in public records yesterday, the Port Authority gave Mr. Chang $30 million for the 7,400-square-foot property at 431 West 33rd Street, an extra $6 million on top of what he agreed to pay for it in November. This deal, which went to contract in late May and just closed, was authorized by the Port Authority’s board in April [PDF].
It’s not clear to us how long it’s been known that this site would be targeted for acquisition for the tunnels, but the first public documents we were able to find targeting the site came in February, when ARC’s draft environmental impact statement noted that the lot may be needed.
After that document came out, Mr. Chang filed in March for a permit to build a 26-story hotel on the site, according to records at the Department of Buildings. He hadn’t yet gotten the permit, but, according to DOB, started construction on the site anyway. DOB slapped a stop-work order on the property in late April.
Mr. Chang didn’t respond to a request for comment, and we’re still waiting to hear back from the Port Authority on why it needs the site, and to see if it has any insight as to why the price went up.
Mr. Chang bought the site from a company listed as Shea NY33, which itself bought the site in 2006—a year after the completion of a far West Side rezoning—for $9.4 million, according to property records.
Tripling value in two years? Not too shabby.
Update 4:15 p.m.
Port Authority spokesman Marc LaVorgna told us that the land acquistion, which is the first for ARC, is needed to provided access to the tunnels from the site. The purchase was made now, he said, because the price was likely to go up had the site been developed.
"The longer we waited, the more it was going to go up due to the potential development," he said.
Follow Eliot Brown via RSS.