Creating and Expanding New York City’s Neighborhoods
- May 11, 2011
By K. Thomas Elghanayan, TF Cornerstone
When you have been in an industry for four decades, your business is your life. This is certainly true for my brother and me. In fact, our interest in real estate and the urban environment arose long before our professional careers began. Our lives have been interwoven with the development of New York City since we were children. We immigrated to the United States as young children, grew up in Forest Hills, Queens, and were quintessential city kids, riding the subways and exploring the neighborhoods across the city. We were always curious about how neighborhoods came into being. Our lifelong personal history in the city is the key to our understanding of how neighborhoods emerge and grow.
Part of what makes New York so full of opportunities is its enormous diversity. From a developer’s point of view, the value in building in different neighborhoods is the ability to appeal to a wider variety of potential residents. We were one of the first developers to see the opportunity in buying old commercial buildings and converting them into luxury residences. This was considered risky when we started, but we saw a chance to provide people with housing in great locations with features such as high ceilings and unusual and interesting room layouts. We have done this in Chelsea, the Meatpacking District, the West Village, Battery Park City and, more recently, in the Financial District, the Hudson Yards and in Long Island City, Queens.
The TF Cornerstone strategy has always been to understand what makes neighborhoods successful and to use this knowledge to push the boundaries of existing neighborhoods. In 1998, when TF Cornerstone purchased the Chelsea Mercantile building, located on 7th Avenue at 25th Street, from the United States government, the perceived “core” of Chelsea stopped at 23rd Street. In addition, the city’s zoning prohibited this vacant 820,000-square-foot industrial building from being redeveloped for residential use.
We approached City Planning to rezone a two-block portion of 7th Avenue in Chelsea, ultimately winning approval to convert the vacant industrial building into 354 condos. We also constructed what is now the Chelsea Centro, a 356-unit, 18-story luxury rental tower located on a nearby development site. Prior to the development of these projects, the neighborhood had been in a state of decline. Now the neighborhood is the center of the Manhattan art scene and one of the most sought-after places to live in the city. Today, Chelsea extends up to 28th Street.
New York’s West Village and Meatpacking District have colorful histories. While this area was once home to slaughterhouses, storage and packing plants and later known as a derelict post-industrial zone, it has subsequently undergone an incredible transformation. My brother and I began investigating the potential of these neighborhoods as early as 1970, purchasing and renovating several buildings and becoming instrumental in the rebirth of the area. In 1990, we purchased a five-block portion of an elevated railroad viaduct in the West Village, known as “the High Line,” from Conrail, a national railroad company.
TF Cornerstone worked closely with the U.S. Federal Surface Transportation Board, City Planning and the local community board to achieve a rezoning of three city blocks in the West Village from manufacturing to residential. The approval to build here was significant, considering the historic character of the area and the predominance of low-rise buildings. The condemnation of a portion of the High Line and the rezoning resulted in the renovation of 95 Horatio Street, as well as the construction of 99 Jane Street and 100 Jane Street.
Our story in downtown Manhattan is similar. By the mid-1990s, many companies whose offices had been located in the Financial District were moving uptown where they could rent more efficient office space with larger floor plates. The vacant office space they left behind created an opportunity to repurpose commercial buildings as apartments and condominiums. We did this in 1997 at 45 Wall Street, a 468,000-square-foot office building that we converted into 435 luxury apartments. This building was no longer profitable as office space, but was very valuable as residences. We were able to take advantage of the location and create a neighborhood where people could both live and work, even though there had been no residential development on Wall Street in approximately 200 years.
Our most recent success story has been the development of the far West Side of Manhattan, in the neighborhood known as Hudson Yards. The New York City Department of City Planning, the MTA (Metropolitan Transportation Authority) and several developers have worked together to encourage business and residential growth in the currently under-utilized far West Side. TF Cornerstone has had success with two new luxury rental buildings, designed by Handel Architects. In planning these residences, TF Cornerstone included space for retail and other amenities that were needed to make this underdeveloped area a viable neighborhood. Today, both 455 West 37th Street and 505 West 37th Street, together over 1,200 units, are fully occupied, and an area that was once considered undesirable now thrives as an expanding neighborhood.
As we look to the future, TF Cornerstone will continue to build on our tradition of creating and expanding New York’s neighborhoods. Our largest current development is the East Coast project on Long Island City’s waterfront, a neighborhood that has transitioned in recent years from a major industrial hub to a residential and cultural center. We hope that Center Boulevard will become a destination for New Yorkers who want to stay close to Manhattan but value the open park space and views that Long Island City has to offer. Three of the four planned buildings will sit directly on the waterfront, where residents will enjoy unobstructed river views. The buildings will feature retail on the ground level, residential homes on upper floors and integrated parking. To accommodate the influx of families, we’ve worked with the School Construction Authority to include an elementary school as part of this project. In addition, we have worked with the state development authority to focus our money and efforts where it will provide the most benefit for the community.
I’ve been asked many times to explain the success of my company in picking the “right” properties to buy or the “right” neighborhoods to bet on. The answer is that neighborhoods are not picked; they are made. Over many years TF Cornerstone has developed a strategy for identifying properties and investing in the community from the ground up. We not only design residences in which people love to live; we design communities. Investment in any emerging neighborhood requires taking the long view, and that is what we have always done. From our first acquisitions purchasing small brownstones in the Village, to our recent projects creating residential neighborhoods, we have faith in the strength of New York City’s real estate market and will continue to push its frontiers forward.
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K. Thomas Elghanayan, chairman and co-founder of TF Cornerstone, oversees a commercial and residential real estate portfolio of more than 8 million sq. ft. throughout New York City and Washington, D.C. Prior to TF Cornerstone, Tom and brother Fred, also of TF Cornerstone, founded Rockrose Development Corporation in 1974 with their older brother Henry.