Related and Wilpons Win Willets Point, Plan Mall [Update: Defendents 'Ecstatic' City Abandoning Eminent Domain]

81215345 Related and Wilpons Win Willets Point, Plan Mall [Update: Defendents Ecstatic City Abandoning Eminent Domain]

From muck to mall. (Getty)

Willets Point has long been one of the most neglected corners of the city, famously appearing in The Great Gatsby as “the valley of ashes.” The Bloomberg administration has been working for years to redevelop the 62-acre Iron Triangle, long home to auto body shops and a handful of heavy industries nestled between the Mets stadia and downtown Flushing.

Today, City Hall took a step toward spiffing up the site, if not quite in the direction it had hoped.

The administration withdrew its eminent domain case, known as a determination of findings, from state appellate court, halting takeover proceedings against a handful of holdout property owners in the area. This paves the way for the project to move forward, albeit in an altered form from the 2008 rezoning, which called for a mixed-use development on the site.

According to people familiar with the situation, the city is close to reaching a deal with the Related Companies and Sterling Equities to build a mall on the site. The exact details are still being worked out, and an official announcement is expected in the coming weeks.

It was not immediately clear if there would still be a residential or convention center component in the final plan, but City Hall is still looking favorably on the latest developments for the development.

“We’re very close to having a deal in place that will transform Willets Point into New York City’s next great neighborhood and continue the historic progress we’ve already made there,” Bloomberg spokeswoman Julie Wood said in a statement. “Today’s action ensures that our plan will comply with the site’s myriad technical and legal requirements.”

Ms. Wood declined to discuss whether or not Related had won the bid, and Related declined to comment. Sterling Equities, which is run by Mets owners Fred Wilpon and Saul Katz, did not return a request for comment. Still, finally a win for those two. As for Related, is there a city-controlled project they cannot win?

Previously, the city had planned for a developer to build 5,500 units of housing, about a third of which would be affordable, more than a million square feet of retail, and a hotel that was to have served, among other things, a new mid-size convention center. That part of the plan had been called into question now that Governor Andrew Cuomo wants to build a massive convention and casino complex at Aqueduct.

The project had been broken up into three phases, a result both of the recession, which left developers leery to take on the project, but also the fact that there were still dozens of properties within the 62-acre site that the city did not yet own. Splitting the project into phases meant at least part of the redevelopment could proceed, arguably the most important part, the 20 acres closest to neighboring Citi Field. For the first phase, 680,000 square feet of retail and 400 units of housing were planned.

Another reason the initial plan was abandoned was that all the developers interested in the project—other contenders were Silverstein Properties, TDC, and Avalon Bay—were unsure of the ability to execute even such a modest proposal for one of the most complex sites in the city.

Part of the reason Willets Point became the Iron Triangle is the land is essentially a bog, lying a good six feet below the rest of the area. It would require significant excavation and landfill to bring it up to grade. Further complicating matters, centuries of industrial activity—remember the valley of ashes?—has left the ground heavily polluted. Any development would require significant remediation of the site before it could move forward.

These vexing issues caused all four of Willets Point finalists to propose plans outside the parameters of the phase 1 request for proposals. It appears the city took the proposal it found to be most acceptable and is proceeding with that.

It is not clear whether this would require a new rezoning, but if Related were to build within the 680,000 square feet of retail allowed by the plan, it could probably be built as of right. (It is worth noting that that is the size of another of Related’s malls, the Gateway Center in East New York, best known for being the purported site of a proposed Walmart. Perhaps the big box retailer could come to Queens, instead?)

Another factor beyond the toxicity of the site is, or rather was, the pending eminent domain case, which was to have been heard on Monday. “There were a lot of things going against the city here, and in view of all that, I think someone made the executive decision that this was going against the city and would set a bad precedent for all future takings,” Michael Rikon told The Observer.

Mr. Rikon, an attorney for Willets Point United, a landowner group fighting the city, said that the city faced a tough case because of issues ranging from a failure to have translators at the eminent domain hearing (many property owners are Latino) to not providing notice in person and having no clear public use yet assigned (there was not yet a developer in place at the time of the hearing). “It’s strange, too, because rarely do you win these kinds of cases,” Mr. Rikon said of eminent domain defendants, “but I really thing this could have been different.”

His clients, he said, “are pretty ecstatic.” That said, their future remains uncertain as the city owns much of the land in Willets Point now, and whether it wants to remain a landlord to chop shops seems unlikely. “We wish we knew what the city would do with those leases, because they’re commercial leases and the city is under no obligation to renew them,” Mr. Rikon said. “Really, how interested is the city in rental income? Not very.”

Mr. Rikon also said there was no reason the city could not simply hold another eminent domain hearing in the future, correcting any apparent errors, and take the property all over again. He was hopeful that might never happen. “The remediation alone will cost billions of dollars, so is it really worth it?” he said.

As for a name for this new mall (just what Queens needs!), The Observer has the following suggestion: Call it The Metropolis.

mchaban [at] observer.com | @MC_NYC