By Michael Neibauer – Associate Editor, Washington Business Journal
Real estate bigwig R. Donahue Peebles, unhappy with the current direction of his city and its leadership, is weighing a run for mayor. The Democrat hasn’t made up his mind, but he is “absolutely” interested and says if he does run, he’ll fund his own campaign.
This sounds familiar.
Peebles, a Washington native whose development company is active in D.C., Miami, Boston, Philadelphia and New York, is eyeing a 2017 mayoral run in the Big Apple. You may recall, Peebles was actively considering ( and then not considering, and then considering again) a 2010 D.C. mayoral bid until his mother-in-law's terminal cancer diagnosis forced him to rule it out. She died days after the primary.
The 55-year-old Peebles, who honed his real estate and political skills during the Marion Barry administrations and now has an estimated net worth of $700 million, appears to have first floated a potential New York City run against Mayor Bill de Blasio in a January interview with The Real Deal, a New York real estate publication. He said it again in August and again in September and again in October — to Fox News, to Bloomberg, to New York’s ABC affiliate and to the New York Post, among others. The news section on the Peebles Corp. website is dominated by recent articles about the developer as a possible challenger.
“He’s the mayor of the city,” Peebles told me Wednesday, speaking about de Blasio. “He’s going to be mayor for the next two-plus years and he doesn’t get a pass. He needs to be held accountable for performance, and he needs to start performing.”
In 2010, Peebles called out then-D.C. Mayor Adrian Fenty for dividing the city, for creating a class of haves and have-nots, for failing to lead and provide basic services and opportunities to all residents no matter their location or status or race. While he didn’t run, he was on the stump and spending money on anti-Fenty ads. He said Wednesday he believes “for good or bad, I created the environment for [Vincent] Gray to actually run" and win.
Fast forward to 2013, and Peebles, now active in New York real estate, threw his support to de Blasio for mayor. But that support, following de Blasio's victory, quickly waned. On school choice, minority contracting, public safety, Peebles said de Blasio has failed the voters.
Peebles told Neil Cavuto during a recent Fox News appearance: “de Blasio is left of being a Democrat. He’s more of a socialist. I’m a Democrat with a responsible approach to management.”
Whether or not he runs, Peebles he is committed to fully advancing his projects, including those in the District. Fifth and Eye in Mount Vernon Triangle, he said, "would be well underway by the time I take office." Other Peebles Corp. developments in the pipeline include the Viola Back Bay in Boston, 108 Leonard St. in New York, 1801 Vine Street in Philadelphia and several blocks of downtown Miami.
"I'm giving it a lot of thought," he said of the race. "I'm continuing to have discussions with people in the community, business leaders, religious leaders civic leaders. I probably spend a third of my day doing that. And it tends to grow."
Candidate or not, Peebles has the microphone (and this is New York, so it's turned up to 11) and he's running with it.
An overview of the Peebles project slated for Fifth and Eye streets NW in Mount Vernon Triangle. The first eight floors will house a hotel, while the top four floors will be home to market-rate residential.
The Peebles Corp. has submitted plans to construct a combination hotel-apartment building at Fifth and Eye streets NW in Mount Vernon Triangle, on a D.C.-owned site that the city has attempted to redevelop since before the Great Recession.
According to a zoning application filed Friday, the Fifth and Eye project, at 901 Fifth St. NW, will include a 153-room hotel on the first eight floors and a 52-unit “apartment house” on floors nine through 12. There will be 5,500 square feet of meeting/function space, roughly 7,000 square feet of restaurant and cafe uses on the ground floor, and 86 parking spaces — well shy of the 127 required under the zoning regulations. The 174,278-square-foot building will rise to 130 feet.
The development plan appears to be a downward shift from the previous incarnation, which called for a 200-room Standard International Hotel and 60 market-rate condos.
TPC 5th & I Partners LLC, led by Peebles, is seeking variances from parking and rear-yard requirements, spurring its Friday application with the Board of Zoning Adjustments.
The District chose Peebles (with partners MacFarlane Partners and The Walker Group LLC) for the project over bids from three other teams: Akridge, The JBG Cos. and Trammell Crow Co. The District has said that Peebles’ offer included the most money for the land and the most affordable units.
Peebles has agreed to construct 61 units of affordable housing off-site, in a new seven-story building at 2100 Martin Luther King Jr. Ave. SE — on the parking lot of an office building Peebles already owns. Peebles also said it will renovate the Seaton and Milian parks in Mount Vernon Triangle.
The redevelopment of Fifth and Eye is a decade in the making. Donohoe Development was selected to tackle the site a week before Lehman Brothers collapsed in September 2008. The Arts at 5th and I, as Donohoe called its project, was at first scaled back, and then canceled by the District in February 2013.
A. My parents divorced when I was 5, and I lived with my mother. She was a working single parent, and I learned to be a bit more independent. By the time I was 8, I would often cook for myself and take care of myself. My mother worked really hard, so I didn’t want to burden her with me.
As a teenager, I played a lot of sports and tended to lead the teams. But my mother felt I needed a little more discipline, so she thought I should be a page on Capitol Hill. She had worked at the Urban League years earlier, and one of the congressmen she knew was John Conyers. He helped me get me a position as a page on the Hill.
I was 16. Instead of attending high school near my home, I went to the U.S. Capitol Page School from 6 to 10:30 in the morning on the top floor of the Library of Congress. From 10:30 on, I worked in the House of Representatives. After working all day, I would go home and then have basketball practice until about 9 p.m. Then I would do my homework, go to bed around midnight, and then get up at 4 the next morning to do it all over again. I learned to budget my time very efficiently, and I would catch up on sleep on the weekends.
Then my mother had a prolonged illness and could not really work for about a year and a half. But with my job as a page, and work I did in Representative Conyers’s office, I was able to help support our household. I made some tremendous relationships over the years. My graduation ceremony was in the Cannon Caucus Room on Capitol Hill; President Carter gave me a certificate of achievement earlier in the day. I spent a lot of my childhood watching others lead and learning how to lead.
Did you have specific career plans when you went to college?
I was going to study medicine at Rutgers. One of the frustrating or difficult things for me as a child was the instability. I planned on having a family at some point, and I wanted to be able to take care of them and give them opportunity and stability. So I figured I would be a doctor because I had a good aptitude for sciences.
But after the first year, I decided I wasn’t going to go into medicine, and I went back to D.C. My mother had a real estate appraisal business, and so I worked for her. By the time I was 23, I was the youngest person appointed to the Property Tax Appeal Board in the district. The next year, I was named chair of the board, one of the most powerful positions in Washington’s real estate industry.
What leadership lessons had prepared you for that?
I learned from watching my mother, and I learned from watching politics. It’s about getting people vested in the outcome of success. I also knew I didn’t need to take credit for everything. I was the chairman, so if the board did well, I was going to get credit for it. But I felt it was important to let other people get credit and recognition, and it gave them more of a sense of ownership in the goal.
Now you’re in real estate development. How big is your company?
We have about $3.5 billion of projects in development. Our executive staff is about two dozen people, and we have fewer than 100 over all.
What other insights about leadership have you learned?
One is that our company should be a vehicle for our employees to accomplish some of their personal goals. It is a two-way street, but we should give people the opportunity to evolve and learn and grow and not put them in slots or force people to stay in their own lanes. People need to focus on their primary responsibilities, but I want to foster an approach where they can broaden their skill set.
I also, for many years, thought the best reward I could give to anyone working in our company was money, whether it was a bonus or a promotion. But I’ve learned that encouragement and acknowledgment are sometimes more important than dollars.
Another thing is that I give a lot of autonomy. I’ve always considered that a good thing — being a hands-off person, and giving people a lot of responsibility and leeway. But one of the things I’ve learned is that people also want more direction because they want to learn. So I’ve become more engaged in specific areas to be more of a teacher.
How do you hire?
I want to know the candidates’ personal goals and how they think our company can help them achieve those goals. And then to see if there’s a good fit, I’ll tell them a bit about our company’s goals and then ask them how they can help our company achieve those goals while accomplishing their own goals.
And then I’ll ask them what are the three things they do best and why, and what are the three things they feel they need to improve on and why. But I’ll also talk to them for the first 20 minutes about their life — where they grew up, what their parents do, and what their goals were when they were growing up. And I’ll ask them if they are happy with their choices.
Do people ever say no?
Most people will say that they are happy with their choices, but some will say they’re looking for more opportunity. What I’ve generally found is that people do not feel they have the opportunity to grow — they’re stuck in their lane and they have a greater interest in doing other things.
Don Peebles, the son of a mechanic, built a real-estate empire that includes three palatial family homes in the Hamptons, Washington, D.C., and Coral Gables, Fla.
The Bridgehampton, N.Y., home purchased by Don Peebles in 2007 for just under $5.4 million. ERICA GANNETT FOR THE WALL STREET JOURNAL
As the founder and chairman of a multi-billion-dollar real-estate development and investment company, Don Peebles knows how to hold out for a deal.
"I was sitting in Miami one summer, and it was so hot," Mr. Peebles recalled. So in 2004, he started to look for someplace cooler—and found an 11-acre compound in Bridgehampton, N.Y., listed for around $20 million, he said. He waited as it came down to $9 million, then $5.95 million. In 2007, he and his wife Katrina paid just under $5.4 million for the home.
"When I buy, I want to be able to feel good that I can sell it in any market and not lose money," Mr. Peebles said.
Today, the Peebles, who have a 20-year-old son, Donahue III, and an 11-year-old daughter, Chloe, typically spend long summer weekends at their Hamptons home, arriving by helicopter from Manhattan, where the family rents a penthouse in the Financial District. If instead the family is coming from home in Coral Gables, Fla., or Washington, D.C., a private plane takes them to the Hamptons.
Mr. Peebles, 54, grew up in Washington, D.C., the son of a car mechanic. His mother worked in real estate to support the family after his parents divorced, giving him an early look into the industry. As a teenager, he began volunteering for political campaigns, and served as a page on Capitol Hill in high school. He left college after a year to work as a real-estate agent and, later, a property appraiser. His early years of political work paid off: At 24, he was appointed by Marion Barry, then D.C.'s mayor, as the chairman of the city's real-estate tax-appeals board.
His Washington connections both in politics and the close-knit world of real estate helped fuel his ascent. In 1987, he broke ground on his first building. His company, Peebles Corp., with offices in Miami and New York now includes a multi-billion-dollar portfolio of condo projects, hotels and office buildings. African Americans are rare in the upper tiers of real-estate development, and Mr. Peebles noted that people would often underestimate him as an African-American man on the rise in the industry. Since there weren't any industry mentors for him to look up to, "I had to figure it out myself through trial and error," said Mr. Peebles, who has written two best-selling books on wealth and investing.
In 1992, he married Katrina, a former public-relations and advertising executive who grew up in a military family. They met in Washington—he saw her walking down the street in Georgetown on a summer evening and asked her out. They moved in together a month later. She is now principal and creative director at Peebles Corp.
Together, their development projects include the Royal Palm Hotel, a 420-room hotel in Miami Beach, and the Residences at the Bath Club in Miami Beach, a 1928 private club that was restored and developed with 107 luxury condominiums and six oceanfront villas. The company is currently developing a Standard Hotel in D.C. that will have 59 condominiums and 198 hotel rooms, as well as a luxury condo building in Tribeca, 108 Leonard Street.
"One of the things I like about this business is it gives you the opportunity to live many places," said Mr. Peebles, who tends to buy homes in the areas in which he's working.
Mr. Peebles has had a few high-profile stumbles. In Washington, a $47 million office-lease deal in the mid-1990s fell through, and Mr. Peebles took some criticism over his close friendship with controversial former Mayor Barry. The incident ultimately drove Mr. Peebles to start looking for business in Miami, where he relocated with his family in 1998.
While driving his son to school in Coral Gables, Mr. Peebles spotted a Mediterranean Revival-style property under construction that was designed as three homes under one roof. Around 2003, he offered to buy the property unfinished, a deal the owner rejected. In 2004, the home's contractor called to tell Mr. Peebles the home was still available. By the end of the year, the couple purchased the property for $5.45 million.
"We knew we wanted a compound," recalled Mrs. Peebles. But the place still needed lots of work—more than they initially realized. "After we closed, I went to look at it and I couldn't believe I had bought it. I couldn't go back there." Mrs. Peebles spent the next year overseeing the home's completion, which came together just in time for Mr. Peebles's 45th birthday party, which they hosted at the home just a couple of hours after the construction crews pulled away.
The 17,000-square-foot home on 3½ acres was built mostly of concrete, to withstand hurricanes. But the facade is now covered with vines. "It was so much cement, I had to grow something so it wasn't just 17,000 square feet of stucco," Mrs. Peebles said.
Inside there are ornate crown moldings, tile and hardwood floors and a chandelier hanging in almost every room. Interior archways and columns give the home a historic feel, and there's a walnut wood-paneled library as well as a lake-like saltwater swimming pool out back.
The formal vibe is something almost all of their homes have in common. "Formal is friendly and familiar to us," says Mrs. Peebles. "It's just the way we live."
Their Bridgehampton home, designed by Peter Cook, was built in 2000, but has Gilded Age amenities. French doors open to wrought-iron Juliet balconies in the 11,000-square-foot, four-story main house. A dramatic Versailles-esque double staircase off the back of the home overlooks a large, manicured lawn where the family plays football and softball.
A French country kitchen with copper sinks is downstairs on the home's lower level—a nod to a time when cooking was done by the staff, out of sight of homeowners and guests. The Peebles say they hire a local chef for events and special occasions, but also enjoy doing much of their own cooking. Every morning, the staff sends a tray of coffee from the kitchen up to the Peebles's second-floor master suite via dumbwaiter. When hosting company in the main dining room, the staff sends up trays of prepared food on the dumbwaiter. Having food prepared by a staff separately downstairs, Mrs. Peebles said, "lets me focus on our family and my guests."
In 2007, the same year they bought their Bridgehampton home, the couple acquired a 1929 Tudor-style home in D.C.'s Massachusetts Avenue Heights neighborhood, near the vice president's residence. With espresso-colored hardwood floors, white walls and minimalist window coverings, the home has a more contemporary feel than the other properties. In the family room, there are painted white stone walls and a large abstract painting. Mr. Peebles, who briefly considered a run for the mayor of D.C., described the 10,000-square-foot house as "understated from the front, but very grand in the back." The couple paid $5.9 million for the home. In 2011, the Peebles hosted an event for President Barack Obama there, and they have hosted various political fundraisers at their other homes as well.
In most of their homes, they've added a few whimsical and kid-friendly touches that offset the formality. In Bridgehampton, for example, there's a trampoline out back and a giant abstract painting called "Tree of Life" at the bottom of rotunda. In a bathroom nearby, two tiny bronze figures rappel down a wall.
The Peebleses said that perhaps the only thing missing from the Bridgehampton home is the beach. A few years ago, they decided to buy another home in the area that's right on the water. On a recent afternoon they cruised over to Sag Harbor, about five minutes away, in their Rolls Royce Phantom convertible to their 2,500-square-foot home in a quiet, predominantly African-American enclave.
They purchased the beach house in 2008 at an estate auction, placing the winning bid over the phone for $2.2 million. They spent several months and about $800,000 gut renovating the property. (Their son, 14 at the time, earned money that summer helping with demolition and roof work.)
The three-bedroom, 2½ bathroom home is close to its neighbors and perched a bit above the beach, which is just down a wooden staircase from their back deck. On a small lot, the home has a wood-and-brick exterior that has been painted white. A terrace spans the upper level with a clear Plexiglas railing—a design element "borrowed from the development world," said Mr. Peebles. Crisp, white-leather chairs and a couch surround a fireplace clad in stone. The master suite has a vaulted white ceiling, and the walls are decorated with nautical map artwork.
Sometimes they'll retreat to the smaller beach house just for the day, or spend a night or two away from their larger Hamptons home. In the summer they'll gather with friends on the deck to watch the Fourth of July fireworks over the water.
Mr. Peebles said they plan to hold onto the beach house for a few years because his son, who works for Mr. Peebles in addition to attending college, said he wants to save up to buy it for himself.
R. Donahue Peebles III Is Influencing His Father's Decisions—for the Good
R. Donahue Peebles III was mentioned in a newspaper story about his father in 1995 when he was younger than 2 years old.
The Washington Times wrote that Don Peebles was selling his mini-fleet of luxury cars, in part because of the demands of fatherhood. A four-door Mercedes "was more practical" than his Porsche and Bentley for taking around a toddler, said the older Mr. Peebles, who was on his way to becoming one of the country's biggest African-American real-estate developers.
Today, the younger Mr. Peebles is 19 and a sophomore at Columbia University. But he's involved in the family real-estate business, Peebles Corp., and already having more impact than determining what kind of car his father gets around in.
Indeed, the son has been the driving force behind the Peebles bid on the redevelopment of Long Island Community Hospital in downtown Brooklyn. The project has been met with community opposition and is heading into its third round of bidding.
The Peebles bid has a major affordable housing component, which was included because the younger Mr. Peebles has been encouraging his father to expand into that business.
"He's been a good influence on me," said Don Peebles, 54, who would earmark 35% of the apartments in the redevelopment for low- and moderate-income renters.
It isn't unusual in the world of New York's real-estate families for a son to follow in his father's footsteps. But the Peebles are exceptional because of the extent of the son's involvement at such a young age.
In the summer after his freshman year at Columbia, Donahue Peebles launched an effort to develop a Standard Hotel with condos in the Mount Vernon Triangle neighborhood in downtown Washington, D.C. The company is one of the finalists for that parcel of land.
"I've watched this process so many times, it almost felt like dinner-table conversation," the younger Mr. Peebles said.
The grandson of a hotel doorman, the older Mr. Peebles was raised in Washington and Detroit by a divorced teenage mother. He dropped out of Rutgers University to join his mother in her real-estate appraisal business and went on to create a real-estate empire that includes about 6 million square feet of hotels, condos, office buildings and other properties either managed or under development mostly in New York, Washington and Miami.
He also was drawn to development at an early age, completing his first project at the age of 26 in Washington's Anacostia section.
"I thought he was a winner and took a chance," recalled Stephen Maged, his partner on the deal. "I'm an old guy now and so proud of him. He's surpassed even my wildest dreams."
Mr. Peebles's success stemmed in part from his participation in government projects that set aside business for minority developers and his use of minority-owned construction companies. He's best known for such developments as Miami Beach's Royal Palm hotel and Washington's Courtyard Marriott Convention Center.
The younger Mr. Peebles entered the family business in part because his parents—mom Katrina is responsible for the company's marketing and design—believe a strong work ethic is important, especially growing up in an affluent family. Both father and mother tell the story of their son as a young boy asking for a stuffed rattlesnake—a real one—and making him work all summer in the business until he had earned enough to buy it. He still keeps the rattlesnake as a reminder.
If Peebles Corp. lands the Long Island Hospital redevelopment, it will be the company's biggest project in New York. Currently, Peebles is redeveloping the criminal court building at 346 Broadway in TriBeCa.
The Peebles also have an 11-year-old daughter, Chloe, who is interested in architecture and design.
Plans to develop black-owned boutique hotel at city landmark
Artist rendition of the proposed hotel
In a landmark deal, Peebles Corporation (No. 96 on the BE INDUSTRIAL/SERVICE list with $22.9 million in revenues) entered a deal to develop and own the first major hotel to be owned by an African American firm.
In partnership with P&A Associates, a real estate development company, the companies will develop a new 199 room hotel at 1801 Vine Street in Philadelphia to be managed by Kimpton, a boutique hotels operator. The development team will acquire the property for $4.5 million and invest a total of $85 million for the redevelopment. Peebles Corporation will own a 90% equity interest in the project.“It will have a significant amount of ballroom and meeting space, 14,000 square feet and the space is just spectacular because the building is a local state landmark and in the process of being a nationalstate landmark,” says R. Donahue Peebles, CEO of Peebles Corp.
Peebles also says the deal will be historic from a minority participation perspective. The general contractor is McKissack & McKissack, a black-owned architecture and construction company. “Weare going to bring in and ensure that the talented minority subcontractors in that market get opportunities and McKissack & McKissack has had a major business in Philadelphia,” says Peebles. “We’re going to charge them with making sure that there is historic minority businessparticipation and make sure there’s opportunity for career advancement for minority professionals at the hotel.”
The new hotel will feature 199 guest rooms, 16,000 square feet of spa and fitness space, 14,000 square feet of meeting and event space, and 5,800 square feet for a restaurant and bar. This marks another deal in the Northeast for the formerly Florida-based entrepreneur. In March 2013, BEreported that Peebles Corp., acquired the iconic 346 Broadway, a 13-story office building and original headquarters of the New York Life Insurance company in downtown Manhattan for $160 million. The Peebles Corporation has $2.5 billion in projects in the pipeline and is eyeing additional projects in Brooklyn, Oakland and Detroit.
The Peebles Corporation has enlisted Elad Group as a partner in acquiring a landmarked 400,000-square-foot building at 346 Broadway — also known as 108 Leonard Street — in Tribeca for $160 million. The developers closed on the deal today, Peebles Corporation said.
After a yearlong application and proposal process, the company will now proceed with plans to transform it into condominiums and a hotel. This is Peebles’ first acquisition in the city.
Peebles told The Real Deal he teamed up with Elad for its expertise with restoring landmarked buildings such as 250 West Street in Tribeca And The Plaza Hotel on the Upper West Side. The city approved the partnership soon after.
The pair is investing $100 million, roughly one quarter of the $400 million that will be spent on the restoration, a source told The Real Deal. Goldman Sachs also provided an acquisition and pre-development loan of an undisclosed amount, the source said. The remainder of funds is from other debt.
After the city evacuates the building in May, the developers aim to start interior demolition. Sales would then launch late next year, with a 2016 opening date. The architect has yet to be announced.
The hotel component will include 50 to 100 Rooms Over Two Floors On The Eastern Broadway side of the building. Peebles said he is in talks with two five-star hotel brands, but declined to disclose which ones.
Plans call for 100 to 140 condo units, the prices of which are yet to be determined. Peebles said in May that prices would start at about $1,500 to $1,600 per square foot, but said now they would be much higher. He dubbed this project the “prewar alternative to 56 Leonard,” referring to the blockbuster new construction condos down the street.
“The market has really moved and created tremendous strength,” Peebles said.
Udi Erez, CEO of Elad, could not be immediately reached for comment. The Israeli newspaper Haaretz first reported Elad’s involvement. [Haaretz] — Mark Maurer
Sale of Two Civic Center Buildings Will Reduce City's Real Estate Footprint by Nearly 600,000 Square Feet
City on Track to Surpass Goal of Reducing 1.2 Million Square Feet of Office Space; Total of $470 Million in Rent and Operating Expense Savings Achieved for the Next Two Decades
Mayor Michael R. Bloomberg, Deputy Mayor for Operations Cas Holloway, Department of Citywide Administrative Services Commissioner Edna Wells Handy and New York City Economic Development Corporation President Seth Pinsky today announced an agreement to sell two City-owned buildings for nearly $250 million as a part of the Administrat ion's government consolidation plan to reduce City government office space by 1.2 million square feet by 2014. The Mayor first announced the intention to sell the properties – 49-51 Chambers Street and 346 Broadway – in his 2012 State of the City address, and it represents a major step in the Administration's efforts to increase efficiency by eliminating underused office space and relocating employees to office environments that better serve the City's needs. The agreements for the sale of the buildings, which will be presented to the Manhattan Borough Board for approval,will generate an estimated $120 million in net revenue for the City, after the costs of relocating various City agencies and the creation of a space for public use for the community. In addition, the City will save approximately $120 million in operating expenses over the next two decades. The Mayor was joined at the announcement at 49-51 Chambers Street, formerly the Emigrant Industrial Savings Bank, by Manhattan Borough President Scott Stringer, Council Member Margaret Chin, R. DonahuePeebles, Chairman and CEO of the Peebles Corporation and Joseph Chetrit of the Chetrit Group.
"In 2010, we set a goal of reducing City agency office space by 10 percent within four years – equivalent to 1.2 million square feet," said Mayor Bloomberg. "Today's agreement brings us more than 80 percent towards that goal, dramatically reducing the amount of office space used by City agencies and making agency operations more efficient and less costly. Moreover, it will continue the revitalization of Lower Manhattan, stimulate economic development and bring more than $100 million into the City's treasury."
In 2010, the Mayor announced plans to consolidate City-owned real estate, eliminating 1.2 million square feet of City office space over four years. After the sale of the two buildings announced today, the City will have eliminated a total of 1,067,000 square feet since 2010, producing at least $470 million in annual rent and operating savings over the next 20 years. Through a competitive Request for Proposals, the Chetrit Group and the Peebles Corporation were selected to purchase 49-51 Chambers Street and 346 Broadway, respectively. As a part of the agreement and following extensive community input, the City worked with the Peebles Corporation to convert 16,000 square feet of 346 Broadway into a digital arts and media space dedicated to public use.
"In the modern office environment designed to foster collaboration through open seating plans and fewer offices, the City currently occupies more office space than it needs." said Deputy Mayor Holloway. "The sale of these two Civic Center buildings and relocation of City employees to modernized office space will save money and give many City employees brand new work spaces that encourage open communication and teamwork."
"With the sale of these two buildings, we will see the fulfillment of long-desired mayoral goals," said Commissioner Handy. "First, we bring these buildings to a higher and better use. In addition, we further the Mayor's goal of space optimization and utilization, reducing the City's use of leased office space in favor of existing city-owned property and providing an opportunity to upgrade the workspaces for a new generation of city workers. Finally, we meet the Department's goal to provide service that is better, more efficient and greener while bringing in much-needed funding to the City coffers."
"With the sale and redevelopment of these historic buildings, they will not only be restored and put to better use, but they will also bring a significant economic and cultural impact to Lower Manhattan and the entire City," said New York City Economic Development Corporation President Seth W. Pinsky.
"A year ago we raised concerns over the lack of community-oriented uses associated with the Civic Center sale, and since that time, we have been able to work with Mayor Bloomberg, Deputy Mayor Cas Holloway, DCAS, and EDC to modify the plan in a way that can meet both the City's fiscal needs and those of the community," said Borough President Stringer. "The new plan will create and fit-out a 16,000 square-foot, youth-oriented digital arts space. To compliment this programming, the city's proposal has provisions for hiring low-income New Yorkers through the HireNYC program and including Minority and Women Owned Businesses/Enterprises. I would like to thank the administration for working collaboratively on this project and look forward to continuing to resolve any outstanding issues, such as the programming of the community space and ensuring a high economic benefit through the inclusion of good paying jobs."
"I want to thank the City for engaging the Lower Manhattan community to help determine the use of these publicly-owned buildings," said Council Member Chin. "I am pleased at the inclusion of community space for downtown youth programming in 346 Broadway that ultimately will reinvest $35 million in our community. The sale of these buildings will help generate much-needed revenue for our City and will cut down on operating expenses. I want to thank Mayor Bloomberg and Deputy Mayor Cas Holloway and offer my support in their drive to make our City's government more efficient."
"Not only has DCAS led the effort to revitalize and optimize City government space – but these sales will create new life for distinctive buildings that have been an integral part of Lower Manhattan for more than a century," said Joey Koch, DCAS Deputy Commissioner and Chief Asset Management Officer. "These buildings have great bones and they will be restored to their historic grandeur."
"I would like to express my gratitude to the Mayor and to the City of New York for the opportunity to restore and develop this very significant building," said Joseph Chetrit of the Chetrit Group. "The Chetrit Group looks forward to working with the City and the Lower Manhattan community as this project moves forward."
"On behalf of The Peebles Corporation, we are honored by the trust Mayor Bloomberg and the City of New York have placed in us by awarding The Peebles Corporation such a significant and iconic landmark," said from R. Donahue Peebles, Chairman and CEO of The Peebles Corporation. "Since the inception of The Peebles Corporation, we have excelled in public-private partnerships and engaged in restoring and reusing landmark buildings for the purpose of historic preservation, economic development, job creation and community transformation. Over the past 25 years, we have continued this tradition in Washington, D.C., South Beach, Miami Beach, San Francisco and now New York City."
Since 2010, the Department of Citywide Administrative Services has also completed a total of 50 City agency relocations, consolidations and space termination projects – with 21 currently underway and 15 additional projects in the development phase. In addition, the Department has created new metrics for agencies to track square feet per employee to hold agencies accountable for space usage and identify trends and opportunities for reductions within their real estate portfolio.
The City, in part, has been able to consolidate office space because of a reduction in the City workforce by approximately 18,000 employees since the start of the Bloomberg Administration – with a City government that is providing more services with fewer employees through innovation and efficiencies.
Located at 49-51 Chambers Street and 346 Broadway, the properties – which currently house various City agencies – will be redeveloped as a mix of hotel, residential and community uses under the agreements, which will be presented to the Manhattan Borough Board. Together, these projects are anticipated to bring in excess of $500 million in private investment, generate more than $70 million in additional tax revenue over the next 30 years and create more than 550 construction jobs and 60 permanent jobs. The developers have committed to following a minority-owned business enterprises and women-owned business enterprises plan and HireNYC program, which require good faith efforts to achieve the hiring and workforce development goals.
The Peebles Corporation, a certified minority-owned business enterprise and one of the country's largest African-American owned real estate development company, will buy 346 Broadway for $160 million and is expected to convert the property into a mixed-use building with residential, hotel, retail and community facility components. The agreement also includes the establishment of a 16,000 square feet digital arts and media community facility located at 346 Broadway for public use. The Chetrit Group, one of the most active developers in New York City, is set to purchase 49-51 Chambers Street for $89 million and expected to convert the property into residential and retail uses. Approximately 30 percent of the building at 49-51 Chambers Street is currently vacant or used for storage – an inefficient use of valuable real estate.
The City created a Community Task Force – comprised of the Department of Citywide Administrative Services, local elected officials including Borough President Stringer and Council Member Chin and representatives from the community board – to incorporate community feedback and recommended uses for a public facility at the location following the sale. Based on recommendations from the Task Force, the City worked with the Peebles Corporation to integrate the 16,000 square feet community facility for digital arts and media within 346 Broadway.
In the 1960s, the City acquired 49-51 Chambers Street and 346 Broadway as part of a larger plan to improve the Manhattan Civic Center that ultimately never came into fruition. Since then, the buildings have been primarily used as offices for City agencies. In April 2012, the Department of Citywide Administrative Services and the City's Economic Development Corporation issued a Request for Proposals for the disposition and redevelopment of the buildings – both of which have already been approved through the City's uniform land use review procedure. As well-positioned properties in Lower Manhattan, these buildings are strong candidates for adaptive reuse.
