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Dec. 16, 2024

Kramer Levin Hosts Program With NYCEDC, Related Companies and Vornado to Detail NYC’s Top Economic Development and Investment Opportunities

Kramer Levin hosted a full room of New York City real estate executives for a special event titled “NYC Economic Development Outlook: Investment Opportunities Changing the Market” at the Kramer Levin Multimedia Conference Center in New York City on Nov. 21.

Dan Berman, Partner, Real Estate, Kramer Levin, opened the event, sharing that despite several years of upheaval, there is a growing sense of optimism for the New York market heading into 2025. 

NYC’s Outer Boroughs Are Generating Critical Investments in Offshore Wind, Waterfront Development and Sports

In a conversation moderated by Elise Wagner, Co-chair of Land Use at Kramer Levin, Melissa Burch, Chief Operating Officer, New York City Economic Development Corporation (NYCEDC) shared that New York City has many major developments and initiatives that are serving as key catalysts for economic growth. 

Burch highlighted several recent investments made by the city, starting with the acquisition of, and an initial $80 million commitment to the future of, the 100+ acre Brooklyn Marine Terminal. A task force has been developed to guide the development of the waterfront site, which is anticipated to have a major economic impact fueled by the creation of thousands of jobs.

Another highlight is the NYCEDC’s recent Request for Proposals for New York City’s first freight-focused electric vehicle charging facility, multipurpose welcome center and workforce development hub at the Hunts Point Distribution Center. Burch explained that more than half of the food eaten in New York City flows through the Hunts Point Distribution Center. The facility will also support the city’s Green Action Plan.

Wagner then turned the conversation to offshore wind, an endeavor that is not only critical to New York’s ability to deliver clean energy, but will also generate thousands of new jobs. “Revitalizing the city’s waterfronts and workforce development are two critical priorities for the city,” said Burch. “We’re working to expand the Brooklyn Navy Yard’s operating waterfront, an area that has become known as a hub for innovation and advanced manufacturing, with proposed offshore wind projects in the works.” Just next door to the Navy Yard, the South Brooklyn Marine Terminal is being transformed into the largest offshore wind port in the United States. “South Brooklyn Marine Terminal is made possible through a strategic partnership with Equinor,” stated Burch. “The city put millions of dollars into the project, and Equinor matched it with a billion. The city was the catalyst in making this investment possible, and then Equinor joined as a private partner to share both the vision and risk.”

The last major development that Burch highlighted was the New York Football Club’s all electric and open-air stadium being developed in Willet’s Point, Queens. The development will also include 2,500 units of 100% affordable housing, as well as a new school, hotel and conference center.

Real Estate Experts Detail the Drivers Behind New York’s Investments and Deals

Jay Neveloff, Chair, Real Estate, Kramer Levin opened the next panel discussion asking when analyzing deals, what people want to see in New York. The session's speakers, Bruce Beal, President, Related Companies and Glen Weiss, Executive Vice President – Office Leasing and Co-Head of Real Estate, Vornado focused on quality of life, modernization, safety and addressing New York’s housing crisis. 

“There’s a lot to be optimistic about in New York. People want New York running efficiently and they want to be able to have a high quality of life,” stated Beal. He added that “it’s about being able to actually go to work, play and be part of a community that is doing well and one where everyone is doing well.”

Modernity, infrastructure and the campus effect also come into play. “People want new,” Weiss said. “They want new because the city in some aspects feels old. It all starts with infrastructure, and we’ve done an excellent job with the airports, while trains will require more work. We want younger generations to continue to come to New York. In terms of office, they like the campus feel and hanging out in common areas as if they’re in a hotel or campus.”

Weiss and Beal shared that the return to office is at its peak since 2019 and that attracting and retaining talent requires the amenitization of office towers. In discussing whether office-to-residential conversions will pick up momentum, all agreed that if it does, the upside will be the removal of office supply from New York’s inventory. 

Housing Challenges Remain a Top Priority and Focus for New York City

On the topic of office-to-residential, Burch stated that “it’s not a one-size-fits-all solution, and it’s not going to solve the housing crisis, but it will bring housing right to the center of the city, closer to jobs.”

Several new policies and mandates are tackling New York’s housing shortage. Executive Order 43 requires city agencies to review their city-owned and –operated land for potential housing development sites. Other city initiatives, like Mayor Eric Adams’ proposed redevelopment of Gansevoort Square, will serve as catalysts for affordable housing. Burch shared that the city has successfully eliminated a number of the regulatory hurdles for office-to-residential conversions as part of its efforts to deliver greater housing. 

One of the sticking points in delivering housing in New York is a lingering sense of NIMBYism, with communities opposing new residential developments in their neighborhoods. Beal said that real estate leaders cannot let this slow momentum, stating that “It’s fair to be concerned about what’s going on in your block or your backyard, but there has to be more cooperation and trust. He added, “We need to keep pushing, and we need to not get discouraged or distracted.”

Panelists also offered insights on the critical importance of public-private collaboration. “Our goal is to get investment flowing back into the city again and to reset the relationship between the private sector and government to unlock that partnership again,” said Burch at the close of the event.

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