The New York City Council last week approved two large development projects in Queens that either will or could use tax-exempt bonds them. Both projects have been spearheaded by Mayor Michael Bloomberg.

The city plans to create a nonprofit 501(c)(3) corporation to sell tax-exempt bonds to build 5,000 units of housing on waterfront property in the Hunter’s Point section of Queens.

The development, Queens West, was announced by former deputy mayor Daniel Doctoroff in 2006 as an all middle-class project. However, the number of affordable units was dropped to 3,000. Those will be set aside for residents making up to $150,000 for a family of four and the remaining 2,000 units will be market rate. 

The city’s plan is subject to approval by the Internal Revenue Service to allow the nonprofit to issue the bonds for the project. The nonprofit would be the developer, which would in turn hire developers to build out the project over 10 years.  City Department of Housing Preservation and Development spokesman Seth Donlin said he could not provide an estimate for how much the developments would cost 

The Willet’s Point development is controversial and could face legal challenges over the use of eminent domain. The city has been negotiating with property owners on the 62-acre site and is now in control of more than half the land, which has long been occupied by automotive businesses.

The city envisions a $3 billion transformation of the site with a convention center, hotel, office and retail development, and 5,500 units of housing, of which 35% would be set aside as affordable.

Even before the City Council had voted on the proposal, the city had already committed $402.9 million of capital funds to property acquisition and construction on the site in its fiscal 2009 capital plan. Those funds would be spent over seven years.

Officials plan to choose a developer by a request for proposals that will propose financing for the project. That could include bonds issued by the New York City Housing Development Corp. to fund the housing.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.