The developer, which has partnered with investment firm Qatari Diar, received a construction loan from Bank of the Ozarks. WeWork will anchor the development
A pair of new office towers will rise in Long Island City.
Tishman Speyer announced on Monday that it has secured an investment partner, the Qatar-based investment firm Qatari Diar, a construction loan from Bank of the Ozarks and anchor tenants, including WeWork, for the roughly $700 million project. The developer plans to break ground on the development early next year. It wasn’t immediately clear how large Qatari Diar’s ownership in the property would be nor the size of the construction loan being provided by Bank of the Ozarks.
The 27-story buildings, which will sit atop a four-story retail base, will rise at 28-10 Queens Plaza South, adjacent to a 700,000-square-foot office building that Tishman Speyer built in 2011. They will be located across the street from three large residential spires that the firm is in the process of erecting.
In the early 2000s, Tishman Speyer won a bid to acquire the city-owned sites where the new office tower, the recently-built office tower and the residential buildings are located. As part of that deal, the developer received tax breaks for the projects.
The developer will save nearly $65 million on 28-10 Queens Plaza South—that includes an exemption of roughly $4.5 million in mortgage recording taxes, which would normally be assessed during Tishman’s purchase of the site, and nearly $4 million in sales taxes for construction materials for the development. It also got more than $56 million in property-tax discounts for 30 years.
“Thanks to the city of New York’s investment in the area’s infrastructure, enlightened policy decisions and the active support of the New York City Economic Development Corp., the local community and its elected officials, Long Island City has become a model for 21st-century urban development,” Rob Speyer said in a statement. “Tishman Speyer is proud to continue our role in unlocking the area’s full potential as one of the most dynamic, live-work-play neighborhoods, not just in Queens but in all of New York City.”
According to The Real Deal, Tishman Speyer is seeking $145 million in EB-5 funding for the new twin-spire office property. That controversial program allows developers to tap foreign investors in exchange for allowing them to apply for green cards.
Additionally, WeWork will be one of the project’s anchor tenants and will take about 250,000 square feet, Tishman Speyer announced. The developer said that 800,000 square feet of the two towers’ 1.1 million square feet has been spoken for, though it declined to reveal other tenants.
“This will be a fantastic space for us to bring our community of creators to this thriving and dynamic neighborhood,” WeWork co-founder Adam Neumann said in a statement.
Tishman Speyer built the neighboring office tower after it secured a deal for the city’s Department of Health to take the entirety of that building’s space. The three residential towers, which together will hold 1,900 rental apartments, received 421-a benefits before the tax-abatement program expired at the beginning of the year. However, because of loopholes in the 421-a program, none of the towers’ units are required to be affordable in return for the tax breaks.
The buildings at 28-10 Queens Plaza South, designed by architect Raul De Armas of MdeAS Architect, are expected to be finished in 2019. The properties will be connected by 40,000 square feet of retail at the base, which will feature a food hall, space for a major restaurant and shops, and a parking garage.