Carriage City Plaza, the downtown high-rise that is among the city’s most prominent symbols of redevelopment, could change hands later this year.
Based on recent sale activity in the city and the property’s capitalization rate, Executive Director Leonard Bier told commissioners at the May 6 Redevelopment Agency meeting that the 16-story building is being sold by Amalgamated Bank, on behalf of a trade union’s investment management pension fund that acquired it in foreclosure five years ago.
The sale would be done auction style, in which bidders make initial sealed bids, he said, with three to five of the highest qualified bids selected as finalists to be shown the building. The owner then would take the final best offer, with the sale handled by an investment bank to ensure an arm’s length deal, he said.
Bier told commissioners he hopes a finalist will be presented by the end of this month, which would be followed by due diligence on the sale. That means that by September the property could be in the hands of investors who could reinvest in the building, he said, including attracting retail tenants, a new hotel tenant and complete the top two floors and other unfinished spaces.
“It’s very important,” Bier said. “That project was very hopeful. It was the largest redevelopment project at the time, and circumstances caused it to fail. We hope in the right investors’ hands it will be a positive for the city,” he said.
The hotel portion of the building (essentially the first three floors) has been vacant since Hotel Indigo left in September 2013. Owners initially had considered seeking approval to convert the 102-room hotel space into 68 more residential units. The hotel’s closing led to a nearly $19,000 dip in revenues for the Parking Authority last year, related to the Lewis Street parking deck.
Opened in summer 2008 just before the housing market’s collapse, the Carriage City Plaza is among the city’s most prominent symbols of redevelopment (good or bad).
The 220-unit building was approved as a for-sale condominium complex. In 2009, the Redevelopment Agency declared Carriage City Plaza in default of its redevelopment agreement after the original developer, Carriage City Properties, began offering lease-to-buy agreements for unsold units.
The property’s new owner, 80 E. Milton Ave., LLC, is a subsidiary of a pension fund (LongView ULTRA Construction Loan Investment Fund), of which Amalgamated Bank is a trustee and was the original lender for the $65-million project.
80 E. Milton Ave., LLC, acquired the hotel and commercial space, and leased the approximately 147 unsold condo units at market rates. Occupancy rates ranged from 75 to 90 percent, as of a few years ago.
Plans to convert the top floors into 20 additional apartments were approved by the Planning Board in 2013. (I believe the original plan when Carriage City Plaza was constructed was to leave the top floors open as custom penthouse units).
The 20,000 square feet of ground-floor commercial space has been largely vacant for most of the building’s existence. An Edward Jones office has been its longest tenant and after the building opened, a dry cleaner occupied some space for awhile, as well as some very brief stints by coffee shops.