Managing Member at Hanlen Real Estate Development & Funding LLC
Leonard Grunstein has recently released a video slideshow sharing photos of synagogues located in Midtown Manhattan. The video can be found on Grunstein’s YouTube channel and includes photos of such synagogues as, Chabad of Midtown on the east side of Fifth Avenue, near 42nd Street, and The Actor’s Synagogue on the north side of 47th Street, near 8th Avenue.
Hanover Square Park, located in Lower Manhattan’s Financial District, is a mixed-use plaza bordered by Pearl Street to the east and William Street on its southern side. Historically, the square was at the heart of New York’s commodity market and housed the New York Cotton Exchange until the mid 1970s.
Three Hanover Square is a 23-story building located on the southwestern side of the plaza and was the first major residential conversion in the neighborhood. Valued at more than $3 million in 1976, it stood empty for three years after the Cotton Exchange vacated it. The conversion, completed in the late 1970s, was made possible by the application of a tax incentive similar to a J-51 structure that was embodied in the ground lease drafted by Leonard Grunstein, an assistant corporation counsel for the the City of New York at the time.
The J-51 program, administered by the City’s Department of Housing Preservation and Development, provides property tax exemptions and abatements for the rehabilitation or conversion of buildings for residential purposes. Prompting a wave of interest in the neighborhood, more than 7,000 apartments have since been added to the Financial District’s once-limited housing stock. However, in 1976, there were concerns by developers and financing sources about the unpredictability of the J-51 program and its application. To solve the problem, a UDC subsidiary that was tax exempt took title to the property. Concurrently, a financeable ground lease structure was put in place that incorporated the then existing J-51 tax benefits program as part of an in lieu of tax provision in the lease.
Today, 3 Hanover Square attracts tenants with its classicist, turn-of-the-century façade, spacious apartment units and convenient location. With developments like Battery Park City to the west – a project Mr. Grunstein helped realize a few years later – and South Street Seaport just a few blocks east, Lower Manhattan has become “a global model for mixed-use neighborhood success.
The Ruppert Yorkville Towers is a four-building apartment complex located in the Yorkville neighborhood of Manhattan’s Upper East Side. The Towers were built in 1975 to replace the Jacob Ruppert Brewery, which closed in 1965 and left a 20-acre lot open for development.
Four months after the brewery’s closing, the city designated the property — which occupies the four blocks between 90th and 94th streets — as an urban renewal site.
The firm Conklin & Rossant submitted the first plan for development of the site, which called for two high-rise apartment towers and four eight-story buildings, for a total of more than 2,500 high- and moderate-income housing units. Another plan called for a 78-story luxury tower that would have been the world’s tallest at the time.
Eventually, developers settled on a proposal by the architecture firm Davis, Brody & Associates comprised of three separate but stylistically cohesive towers: the high-rise Ruppert and Yorkville Towers and the four-story Knickerbocker Plaza. The plan also included a cobblestone pedestrian mall at 91st Street, a park and a playground.
The buildings were financed through the Mitchell-Lama Housing Program, a public housing subsidy law that seeks to support the development of affordable and middle-income housing in the city. Mandated by law to accept strict rent limitations, developers are entitled to withdraw from the program after 20 years.
In 2003, the owners of the Ruppert Yorkville Towers withdrew from the Mitchell-Lama program, converting 797 of the 1,258 units into market-rate condominiums. As a partner at Jenkens & Gilchrist, which represented the Towers’ owners, Leonard Grunstein drafted the Condominium Offering Plan and negotiated and then organized the closing of the conversion of the properties to condominiums — reported to be one of the largest such conversions in New York City history.
The agreement with the Tenants’ Association, which was embodied in an Amendment to the Condominium Offering Plan, was reached over the course of a few weeks (a process that would normally take more than eight months). It allowed residents to buy their apartments at a significant discount or resell at market rates.
The arrangement itself was monumental and complex, resulting in the simultaneous closing of most of the 797 sales. Buyers, bank lenders, attorneys and managing and selling agents all had to work together to achieve this result. Widely covered by the press, the conversion was described as a “milestone” by The New York Times. Miles M. Borden, one of Mr. Grunstein’s partners, was quoted saying, “In terms of sheer size and speed, I think this deal was historic.”
Carter Horsley, City Realty
Nadine Brozan, “Residential Real Estate; Big Condo Conversion At Towers on East Side,” New York Times, 3/14/03
By the 1950s, the once-prosperous Port of Lower Manhattan had fallen into disrepair following the funneling of sea traffic to Port Elizabeth in New Jersey. In the early 1960s, private businesses, with the support of Mayor Robert Wagner’s administration, proposed landfilling and redevelopment of the area in an effort to revitalize the blighted neighborhood.
In 1966, Gov. Nelson Rockefeller, after reaching a compromise with several other groups interested in developing the area, announced the proposal for what is now Battery Park City in a planned community at the southwestern tip of Manhattan.
Two years later, the State Legislature created the Battery Park City Authority (BPCA) to oversee development of the neighborhood, working with the Urban Development Corp. and several other public agencies on the project. In 1972, the landfilling process began, using material from construction sites around the area.
Although developers completed the landfilling by 1976, officials put the project on hold as the city dealt with dire financial problems.
South Cove | Battery Park City
But in 1978, Mr. Grunstein played a key role in jumpstarting the stalled redevelopment of Lower Manhattan. He helped create the subdivision plan, embodied in the Mapping Agreement he drafted and negotiated, and financeable ground lease form used by the BPCA that enabled redevelopment of the land.
A year later, the City – still grappling with severe financial issues — transferred the title to the land to the BPCA. A new plan, designed in 1979 by the architecture firm Cooper-Eckstut, incorporated the development into the existing infrastructure.
Soon after, redevelopment of Lower Manhattan blossomed. The first residential complex was built in 1980, followed by the completion in 1985 of the World Financial Center – home to the offices of companies such as Merrill Lynch and American Express. Development of the neighborhood continued throughout the 1990s, with the construction of more than 30 residential and commercial buildings.
According to the BPCA, Battery Park City is now home to 17,000 residences, 52 shops and services, 36 acres of green space, 20 works of public art, three schools and two hotels. It is also home to the Irish Hunger Memorial, the Museum of Jewish Heritage, the New York City Police Memorial, the Skyscraper Museum and Poets House.
Leonard Grunstein
Leonard Grunstein 