Leonard Grunstein: Bill De Blasio Should Mandate Affordable Housing

Leonard Grunstein gives insight on Mayor-elect Bill de Blasio‘s plan to increase the amount affordable housing in NYC.  While de Blasio’s plan is praiseworthy, Grunstein points out the plan is also creating apprehension within the real estate industry.  Grunstein stresses there is a vital need for more more middle-income housing in NYC, but current efforts offer small incentive to developers to build affordable housing.

“More can be done in terms of zoning bonuses or overrides for these sites to foster the creation of middle-income affordable housing.”

Grunstein goes on to explain that under the Bloomberg administration, their is a lack of focus on the creation of middle-income units and as a result, the city is missing big opportunities:

“If similar requirements had been in place for the massive Hudson Yards development, there would be an additional 5,000 units of affordable housing constructed. The thousands of people who will eventually work in that new neighborhood could have filled these apartments rather than having to commute from long distances.”

That’s an unnecessary burden for those workers as well as a loss for the city’s economy”

Grunstein advises that de Blasio should foster his relationship with the real estate industry; show that he is willing to work with them.  Choosing to mandate construction of middle-income housing would add to the long-term sustainability and vitality of NYC.  Residents of all income levels will not to be forced leave, they can continue to thrive in the city.

“The city should not leave the decision to include affordable housing up to the developer. Instead, it should have required the construction of affordable housing as part of the RFP and guaranteed the creation of a place where middle-income New Yorkers could live.”

Read Leonard Grunstein’s full article on Gotham Gazette

Tax Incentive Fuels Three Hanover Square Renovation

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.

Leonard Grunstein Named “Super Lawyer”

As a senior partner at the internationally renowned law firm Troutman, Sanders, Leonard Grunstein was named a “Super Lawyer” by Super Lawyers Magazine in 2006. The award, which Mr. Grunstein shared with seven of his colleagues from the firm’s New York offices, recognizes lawyers “who have attained a high-degree of honor and is determined through independent research and peer nominations and evaluations. (Super Lawyers) Selection is a high honor and is determined through independent research and peer nominations and evaluations.

Mr. Grunstein joined the firm in 2005 as a senior partner and then became the Head of its Real Estate Capitalization Group, working on a variety of high-profile cases. In 2006 he represented the Stuyvesant Town and Peter Cooper Village Tenants Association, developing the structure and financing package in what has been referred to as one of the greatest real estate deals ever made. (Other People’s Money)

Mr. Grunstein retired from the practice of law in 2012 and is currently a managing member of Hanlen Real Estate Development & Funding and Hanlen Healthcare Development & Funding. He was recently appointed to the Board of Overseers of the Revel Graduate School at Yeshiva University. (Revel Board)