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Chapter 1: GENERAL CONTEXT

This report is presented to propose uses for a commercial development sites located in Jamaica, New York. Specifically, this report will focus on the following properties located in the Borough of Queens, City of New York, County of Queens and State of New York as depicted below.

Site Synopsis:

The following is a description obtained from Zola’s New York City’s Zoning and Land Use Map of the site that is pertinent to understanding the current parameters at this time:

Lot	144-33	144-35	145-01	145-03
Lot Frontage	20 ft	27 ft	22 ft	19.42 ft
Lot Depth	100 ft	100 ft	111 ft	123 ft
Lot Area	2000 SqFt	2700 SqFt	2442 SqFt	2388 SqFt
Gross Floor Area	2288 SqFt	4860 SqFt	4158 SqFt	2418 SqFt

Current Site Use:

Upon research, all properties are considered mixed-use buildings which are designated for commercial and residential use. All properties are zoned under R6A and C2-4 respectively. Properties located on 144-33 and 144-35 have a combined lot area of 4,700 square feet and a combined gross floor area of 7,148 square feet. Properties located at 145-01 and 145-03 have a combined lot area of 4,830 square feet and a combined gross floor area of 6,576 square feet. The total combined lot area of all properties is 9,530 square feet while the combined gross floor area for all properties is 9,818 square feet.

The property currently located at 144-33 Jamaica Avenue is currently within a building class that is specified as a predominantly retail use site with other uses. The property located at 144-35 Jamaica Avenue is within a building class designated for residential (multiple use) - primarily two family with one store or office. The property located at 145-01 Jamaica Avenue is classified as a Residential (multiple use) - primarily two family with one store or office as well. This building currently holds a retail tenant operating as Jin Li 99 cent department Inc. Lastly there is the property located at 145-03 Jamaica Avenue with the building class of residence (multiple use) - primarily two family with one store or office.

Additionally, the figure above notates that each building within the assemblage has 2 apartment units. This would justify the residential zoning condition for R6A.

With the proposed development project that will be outlined within this report, we are planning and developing under the current zoning parameters creating residential and retail spaces that the current Jamaica, Queens comprehensive plan intends to implement.

This proposal will suggest based on current market conditions and NYC planning board initiatives the properties located at 144-33 and 144-35 will become an Urgent Care offering lab services, medical imaging, clinical and office space for specialists of the Jamaica Hospital Medical Center. Entrance to the Urgent care will be facing the south on Jamaica Avenue on 144-33. Medical office space entrance will be on the southeast side of the building facing 145th. The properties located at 145-01 and 145-03 will be renovated and will remain mix-used buildings that will provide affordable housing and maintain one commercial retail tenant. The locations 144-33 and 144-35 will be a medical office, two story with face brick with concrete block back-up / Steel Joists. 145-01 and 145-03 will also remain a two story with face brick with concrete block backup and Steel Joists.

Chapter 1- 1: ECONOMIC DRIVERS

Downtown Jamaica is experiencing rapid middle-class population growth and is in the midst of a wave of private and public investments in infrastructure, affordable housing, hospitality, retail and industrial jobs. Job growth in downtown Jamaica is currently centered on five distinct areas; industrial related uses, construction, hospitality, retail and aviation related. York College located in the heart of Downtown, just south of Jamaica Avenue, was designated by Governor Cuomo as a Start-Up NY recipient. It is the only such location in Queens and the program is designed to attract businesses-- especially those in high tech, pharmaceuticals, aviation or logistics to sites on or adjacent to the college. The mix of growing job opportunities in construction, retail, hospitality, aviation-related industries and high tech present a diverse range of salary scales and job mobility.

According to the Office of the New York State Comptroller, the number of businesses increased by 39 percent over a 20-year period, much faster than the citywide growth rate (27 percent). The local economy is closely associated with nearby John F. Kennedy International Airport. Business growth has been extraordinary over the past two decades, increasing by 39 percent. In 2014, there were 4,298 businesses, one-fifth of which were retail.

Additionally, Queens is home to John F. Kennedy International Airport and LaGuardia Airport. Moreover, the Landmarks in Queens include Flushing Meadows-Corona Park; Citi Field, which is the home of the New York Mets baseball team; the USTA Billie Jean King National Tennis Center, site of the US Open tennis tournament; Kaufman Astoria Studios; Silvercup Studios, the largest film and television production facility in New York City, and Aqueduct Racetrack.

As shown in figure above, the number of businesses in the Greater Jamaica area totaled 4,298 in 2014. This represents an increase of 39 percent over a 20-year period, much faster than the growth rate in the City overall (27 percent). While the recent recession temporarily dampened growth, the number of businesses increased by 11 percent between 2009 and 2014.

CHAPTER 1-2: DEMOGRAPHIC ANALYSIS

Queens is one of the five boroughs of New York City, located in Queens County, State of New York. It is the largest borough geographically and is adjacent to the borough of Brooklyn at the southwestern end of Long Island. Nassau County is to the east of Queens and it also shares water borders with the boroughs of Manhattan and the Bronx. Queens is the second largest in population size of the boroughs, behind Brooklyn.

According to the NYC Planning Department, the United States Census reported that the population of Queens Community District 12 in 2010 which includes Hollis, Jamaica, Jamaica Center, North Springfield Gardens, Rochdale, South Jamaica and St. Albans was 225.9K. The area and density for the district is 9.6 square miles. WIthin those parameters there are 23,533 persons per square mile. Queens Community District is more dense than neighboring communities such as Queens Community 13 which consists of Bellaire, Bellerose, Brookville, Cambria Heights, Floral Park, Glen Oaks, Laurelton, New Hyde Park, Queens Village, Rosedale, Springfield Gardens with 14,968 persons per square miles. While New York comes in at a whopping 27,000 people per square mile, the density for Queens still holds strong indications that new developments and affordable housing accommodations are a necessity for the population at large. Queens is also the fourth most densely populated county among New York City's boroughs, as well as in the United States.

The figure above outlines that the population for the Queens Community District 12 has a higher female population at 53.4% while the male population rests at 46.6%. The African American population is the highest in the district coming in at 61.2% over all other race origins. Within this population 42.7 percent are foreign born.

According to the provided figure, 22.8% of residents are under the age of 18 while NYC is at 21%. 12.7% of Queens Community District 12 residents are 65 and over.The 30-percent of income standard is a widely used and accepted measure of the extent of housing affordability and it remains a reliable indicator of affordability both over time and across markets. The figure above indicates that for the rent burden 48.0% of households spend 35% or more of their income on rent. The District also demonstrates high ratings with access to parks (76.0%) and Street Cleanliness at (94.9%). Daily commutes to work average at 48.9 minutes.

Crime in the Queens Community District 12 came in at a lower rate with 2,837 major felonies reported in 2017 compared to the borough of Queens at 19,371 and all of NYC at 96,515.

Education in the District signifies that 21.0% of residents age 25 years and older have earned a bachelor’s degree or higher compared to the borough of Queens at 30.8% and NYC at 36.7% making this a very low number for the district compared to all of New York.

The English proficiency of the district is very low at 14.3% compared to all of Queens at 29.3% and all of NYC at 23.1%. This signifies a very diverse and dense cultural mix within the district.

There is a very high unemployment rate in the district at 7.1% which is substantially higher than the rest of Queens at 4.4% and all of New York City at 4.9%. This percentage indicates that job creation, affordable housing and skill development programs are very necessary within the district. Since 2010, unemployment has increased by 2.5 basis points in Jamaica compared to 1 basis point in the borough of Queens. Three percent of Jamaica’s employed residents work in Jamaica and an additional 1 percent work at JFK.

NYCgov Poverty Measure indicates a percentage of 19.0% compared to all of Queens at 19.3% and all of New York City at 19.8%

The above figure obtained from Claritas indicates that the Jamaica Queens highest household income is between $50-$75K. The median household income for the Jamaica Queens population is around $46,500.

According to the Claritas figure shown above dated in 2019, the Queen’s 12 district’s household composition is predominantly made up of 2 person households with no children/other. Overall this information exhibits that the demographic is a young, diverse family market: 41% families with children (married couple or single parent), plus married couples without children and a notable proportion of multigenerational households.

According to Esri, (which obtained housing types and rents from the Census Bureau’s American Community survey) the figure above notates based on the proposed site/properties’ zipcode that residents within the community tend to be renters at 72.4% while homeowners make up only 27%. The figure also illustrates that the typical housing is high-density apartments and single families with an average rent of $1,191.

The average household budget index comprised by Esri indicates what this market’s households budget for housing, food, clothing and other necessities. The market predominantly spends on apparel and services followed by housing, food, transportation and healthcare.

Key Findings: This is a cultural community where families renting apartments in older buildings dominate this market; about one quarter of households have children. Over one-fifth of households have no vehicle, typically those living in the city. Workers are mainly employed in white collar and service occupations (especially food service and building maintenance). One-fifth of workers commute using public transportation and more walk or bike to work than expected. Median household income is lower, but home values are higher, reflecting the metropolitan areas in which they live. Consumers are attentive to personal style; purchases reflect their youth and their children.

Chapter 1-3: GENERAL MARKET CONDITIONS

With respect to retail, Jamaica Avenue presents classic attributes of retail friendly thoroughfares. From the 1940’s-1970’s, Jamaica was the shopping center for both Queens and Long Island with three major department stores located in the Downtown. Located in high-density areas of heavy pedestrian foot traffic, retail rents have been rising to reflect the ongoing revitalization of the Downtown. Well-known and nationally recognized retailers such as Burlington Coat Factory, TJ Maxx, H&M and Old Navy have either recently entered the Downtown or committed to its future. The Downtown Jamaica District is receiving interest from national/regional retail chains and the Greater Jamaica Development Corporation is working with the three BIDS to diversify the retail corridor.

The figure above demonstrates that the vacancy rate, after a recent peak of 7%, has declined to 3.8%. Rents average $72.28 per square foot, up over 100% from 2012 and are among the highest rates in Queens.

Downtown Jamaica is a bustling hub of living, working, shopping, and learning, with the most active uses concentrated along Jamaica and Archer Avenues between Sutphin Boulevard and 168th Street. Retail and office uses are predominantly located along Jamaica and Hillside avenues, Sutphin Boulevard, and at the165th Street Mall. 11,400 housing units,8 primarily in buildings containing 20 units or more, are within the Core Downtown; whereas surrounding neighborhoods consist largely of one- and two-family homes, Downtown Jamaica is predominated by six- to eight-story multifamily structures, with a significant concentration around Rufus King Park. Institutional and public facilities are also a dominant use Downtown, with the largest being York College, which is located south of the LIRR tracks. Despite the increase in the number of rental units, housing affordability is a major problem. The median monthly rent rose from $700 in 2002 to $1,275 by 2014. In Queens the rental vacancy rate was 3.5%.

The chart above illustrates that rents for market-rate units are currently listed at $1,625 for a studio, $1,925 for a one-bedroom unit, and $2,550 for a two-bedroom unit. Across all units, rents in multifamily buildings are approximately $28 per square foot, having recovered to 2007 levels following a decline during the Great Recession.

Chapter 1-4: EMPLOYERS

According to Labor statistics for the New York City region. Private sector jobs in New York City rose over the year by 55,100, or 1.4 percent, to 4,071,300 in October 2019. Gains were greatest in educational and health services (+37,500), professional and business services (+22,600), trade, transportation, and utilities (+8,400), and other services (+2,200). Losses were reported in natural resources, mining, and construction (-6,200), financial activities (-5,700), leisure and hospitality (-2,300), and manufacturing (-1,400). The information sector was unchanged for the month. Major employers in New York are the following:

Major job-creating projects and initiatives are underway for a wide range of opportunities, all of which are either in the Downtown core or are easily accessible to it. As a result of significant past investment from the public sector, Jamaica is poised to undertake substantial job growth and significant community revitalization. As we look at the Jamaica, Queens area here were our findings on current top employers:

Major employers outlined by the figure above indicated that the following major employers in Jamaica, Queens are the following in ranking order: Jamaica Hospital, State Supreme Court, Queens Civil Court, NYC Police Dept./Forensic Lab, New Queens Family Court, US FDA Lab, York College, Social Security Administration, and lastly the Department of Motor Vehicles.

Most local job growth has occurred in the administrative, health care, and retail sectors, which (with transportation) represent nearly all new jobs created in Downtown Jamaica between 2002 and 2014 and reflect the importance of major local employers, listed in the figure above.

According to the Downtown Jamaica Revitalization Initiative as they look forward, it is stated that there are several sectors that are expected to represent growth opportunities for Downtown employment based on recent and expected activity, including:

Health & Life Sciences: Health care-related jobs in the Core Downtown have grown 30% between 2002 and 2014, and Jamaica Hospital, the FDA, and York College (which offers numerous health care-related degree programs and certifications, and recently launched graduate programs in pharmaceutical science and physician assistant certification) provide the foundation for future growth. Statewide, health care jobs are projected to grow by an additional 20% over the next decade, with similar trends expected in New York City, making health-care one of the fastest growing sectors in the economy. This poses well for our proposed site development creating jobs and contributing to the growth of the Jamaica Queens industry tapestry.

Hospitality & Food Services: Jamaica has seen a boom in hotel development since the completion of the AirTrain and the 2007 rezoning. Several major hotels are in development, including approximately 675 rooms in the blocks surrounding Jamaica Station. In total, over 2,000 new hotel rooms are planned to come online in Downtown Jamaica, which could support between 1,000 and 1,500 new direct jobs in addition to the existing 800+ jobs already in the hospitality industry.

Location Quotients

According to a 2017 report from the New York State Department of Labor, the following LQ’s were established for Queen’s County of New York. The top 3 LQ’s for Queens County employment (greater than 1.00) were the following industries: Unclassified Services (Employment LQ 5.34 and total wage LQ 2.97) employed 6,635 with an average annual total wages of $180,567,225. Construction (Employment LQ 1.66 and total wage LQ 2.27) was the second highest which employed 50,681 with annual total wages of $3,843,517,078. Third ranking industry is Educational/Health Services ( Employment LQ 1.49 and total wage LQ 1.35) employed 147,193 with average annual total wages coming at $6,083,058,194. These figures indicate that these industries are producing more than is consumed locally (exporting). The LQ’s are also relative to the United States.

On the State level, the New York Department of Labor reports that at 3.29, securities, commodity contracts and investments has the highest statewide LQ. This industry is very important to the state. Not only did this industry employ almost 195,000 in 2016, it also paid salaries averaging almost $360,000. Nationally, more than one out of every five workers in this sector are employed in New York State. Other information services recorded a strong LQ of 2.78. Industries in this category are primarily news syndicates, libraries, archives, exclusive internet publishing and/or broadcasting and web search portals. These businesses combined employed more than 47,000 in 2016, with an average annual wage of $139,080. Transit and ground passenger transportation ranked third with an LQ of 2.33. While this industry is active in every region of the state, jobs are mostly concentrated in the downstate region. The state employs more than 15% of the nation’s transit and ground transportation workers.

Noteworthy Findings:

The Jamaica, Queens area had the second-highest average commute time among the City’s 55 Censusdefined neighborhoods (50 minutes). Nearly 43 percent of the residents had a commute of an hour or longer, well above the average for Queens (29 percent). About half of the residents were employed as office workers or held jobs in health care, retail or transportation. The most common occupation was home health aide. Almost 12 percent of the residents worked as teachers and first responders, such as corrections officers, police officers and security guards. Jamaica had the largest number (and the second highest concentration) of protective service workers among the City’s 55 neighborhoods.

Chapter 2: PROJECT VISION AND PROPOSED USE

Through research and the ultimate goal of New York City and Jamaica Queens’ comprehensive plans along with the strong indicators within the demographic and employment sectors, we would propose to convert and combine the buildings located at 144-33 and 144-35 to become an Urgent Care offering lab services, medical imaging, clinical and office space for specialists of the Jamaica Hospital Medical Center. An increased plottage value by combining two parcels side by side will increase the value of the current property sites creating larger retail space and more office spaces.

The properties located at 145-01 and 145-03 will be renovated and will remain mix-used buildings that will provide affordable housing and maintain one commercial retail tenant. In the economic development strategy for the New York State’s Downtown Revitalization Initiative (DRI) they seek to “transform communities ripe for development into vibrant neighborhoods where the next generation of New Yorkers will want to live, work, and raise a family.

According to Jamaica Survey respondents, the highest response came with the improvement of storefronts, dining and retail business. Our proposed use target the top three needs of the community at large. Providing an Urgent Care, medical offices and affordable housing and high traffic retail space contributes to the very essence of the downtown Jamaica, Queens tapestry.

144-33 (Property 1) and 144-35 (Property 2)

(Visualization)

The most viable locations for urgent care use are accessible to dense populations exhibiting key demographics with a propensity for urgent care services, heavy traffic counts and a strong retail/service draw. Jamaica, Queens and the site location for this proposed development hits all the targets needed for the project’s success and viability.

Draft Site Plan
144-33	Use	SF	Unit	FAR
Floor 1	Retail	1340	1	3
Floor 2	Medical Offices	948	2	3
144-35	Use	SF	Unit	FAR
Floor 1	Retail	2430	1	3
Floor 2	Medical Offices	2430	2	3

Building Envelope

145-01 (Property 2) and 145-03 (Property 3)

(Visualization)

In 2015, Mayor Bill de Blasio, Queens Borough President Melinda Katz, and Deputy Mayor Alicia Glen released the Jamaica Now Action Plan. The plan, which represents $153 million in public funding, includes 25 initiatives for projects such as streetscape improvements, NYPD security cameras and affordable housing. This proposed use attributes to those efforts by renovating and updating the streetscape and maintaining retail and upgraded affordable housing.

Draft Site Plan
145-01	Use	SF	Unit	FAR
Floor 1	Retail	2,079	1	3
Floor 2	Residential	2,079	2	3
145-03	Use	SF	Unit	FAR
Floor 1	Retail	1,209	1	3
Floor 2	Residential	1,209	2	3

Building Envelope

Chapter 2-1 COMPARABLE ANALYSIS

There are three properties that were selected to conduct a comparable analysis. The analysis consists of the following addresses:

90-28 SUTPHIN BOULEVARD

This property is located in Jamaica, Queens and has the identical building status as a two family dwelling with commercial and retail use. With 3,000 square feet and sold at 2,000,000 in February 2019, the asking rent per square foot was estimated at $1.33. There has been a rent increase since the purchase of the property by $228.00 per month.

149-13 JAMAICA AVENUE

This property is located in Jamaica, Queens and has the identical building status as a two family dwelling with commercial and retail use. With 2,550 square feet and sold at $1,550,000 in July 2019, the asking rent per square foot was estimated at $1.21. There has been a rent decrease since the purchase of the property by $74.00/month.

144-15 HILLSIDE AVENUE

This property is located in Jamaica, Queens and has the identical building status as a two family dwelling with commercial and retail use. With 3,024 square feet and sold at $7,150,000 in February 2019, the asking rent per square foot was estimated at $1.37. There has been a rent increase since the purchase of the property by $87.00 per month.

The vacancy rate for private non-regulated units (were never rent-controlled or rent stabilized, were decontrolled, including those in buildings with five or fewer units, and unregulated units in cooperative or condominium buildings) was 6.07%.

The figure above from the New York City Comptroller’s Office, illustrates the vacancy rate for Jamaica Queens retail which includes the aforementioned comparables. In 2017 the total retail area was 2.4 million square feet. The vacant retail spaces were 95 which equates to 7.05%

The figure above from the New York City Comptroller’s Office, illustrates the retail rental rate for New York City including Queens which includes the aforementioned comparables. Average retail rents increased 22 percent citywide in the past decade.

Chapter 3: REGULATORY / ZONING PUBLIC APPROVAL PROCESS

The subject properties are designated under the following multiple zoning designations as Property Zoning Districts: R6A & C2-4. Details for each of these designations can be found below:

R6A Zoning Designation:

R6A is a contextual district. Contextual Zoning Districts are meant to promote uniformity in the neighborhoods they are zoned in. This results in shorter low rise buildings with large footprints. In Contextual Zone R6A developments are required to follow the Quality Housing Program Regulations. The Quality Housing Program (“QHP”) is common in R6 zones but is mandatory in R6A zones, as well as R6B zones. The QHP promotes shorter wider buildings that would fit into their surroundings. QHP additionally encourages better ground-floor retail and residential spaces together with apartments with adequate ceiling heights.

With a R6A designation, properties consist of multifamily buildings that can be a walk-up property with no elevator or medium sized apartment building. A designation of R6A restricts the development of only residential buildings or community facility buildings unless the property has an additional commercial overlay designation. Each of the subject properties have a commercial overlay designation of C2-4.

C2-4 Commercial Overlay Designation:

There are eight basic types of Commercial Districts, ranging from C1 to C8, which can be grouped into three general types: neighborhood, general and specialty. C1 and C2 Districts New York’s residential neighborhoods often contain streets or areas lined with a broad mix of commercial uses containing the variety of retail shops and other businesses that primarily serve a neighborhood’s commercial needs. These uses are frequently found either in one- to two-story commercial buildings or on the lower floors of mixed buildings

The designation of C2-4 is a sub-district of C2 Commercial Overlay. Certain residential districts will have a commercial overlay which means that there is an underlying residential zone but the commercial overlay allows the development of a commercial use or the ability to develop a mixed use building. See figure below for Commercial Overlays which are depicted as follows:

Source: NYC Department of City Planning

Parking Requirement - 144-35 & 144-33 Jamaica Avenue:

In connection with the properties designated as 144-35 & 144-33 Jamaica Avenue, these lots are intended to be an Urgent Care and Medical Offices. The Zoning Resolution defines Medical Offices as a Community Facility Use as designated under Use Group 4 titled “Ambulatory diagnostic or treatment health care facilities.” Pursuant to the Zoning Resolution, Article III, Chapter 6, Section 36-21, a Community Facility Use under Use Group 4, in Districts R6 generally, require 1 parking space for every 1000 sq ft of floor area (“buildable sq ft”).

The aggregate buildable sq ft for 144-35 & 144-33 Jamaica Avenue total 7140 sq ft which if divided by 1000 sq ft results in a requirement of 7.1 parking spaces (see table below).

Source: NYC Planning, Zoning Resolution. Article III, Chapter 6, Section 36.21

However, pursuant to Article II, Chapter 5, Section 25-261 the parking requirement is waived for in R6 districts up to a maximum number of 5 spaces. This results in a waiver of the entire requirement to provide parking.

Parking Requirement - 145-01 & 145-03 Jamaica Avenue:

In connection with the properties designated as 145-01 & 145-03 Jamaica Avenue, which are intended to be renovated and will remain mix-used buildings that will provide affordable housing and maintain one commercial retail tenant, the parking requirement, pursuant to the Zoning Resolution, under Article II, Chapter 5, Section 25-241 reveals that in R6 districts zones, lot areas that are 10,000 sq ft or less require that 50% of the dwelling units receive parking (see table below).

The aggregate lot area sq ft for 145-01 & 145-03 Jamaica Avenue total 4830 sq ft and there are a total of 4 residential units in 145-01 & 145-03 Jamaica Avenue combined. This would require that at least 50% of the 4 units (or 2 units) receive parking. However, pursuant to Article II, Chapter 5, Section 25-261 the parking requirement is waived for in R6 districts up to a maximum number of 5 spaces. This results in a waiver of the entire requirement to provide parking (see table below).

Source: NYC Planning - Zoning Resolution. Article II, Chapter 3, Section 23-153

Maximum Floor Area Ratio:

The floor area ratio (FAR) in R6A districts is 3.0. The subject properties include two corner lots (lots 33 and 38) and two interior lots (lots 35 and 37). In the districts designated for Quality Housing buildings, the maximum floor area ratio and maximum residential lot coverage for interior lots are 65% as set forth in the table above. And, pursuant to Article II, Chapter 3, Section 23.153, the maximum residential lot coverage for a corner lot shall be 100% percent.

Maximum Height of Building and Setbacks:

Source: NYC Dept. of City Planning ( https://www1.nyc.gov/site/planning/zoning/districts-tools/r6.page )

The figure above reveals that there is a minimum base height of 40 feet, maximum of 60 feet or 65 feet if providing a Qualified Ground Floor (GQF). Once reaching this height, the building must set back by at least 10 feet on a wide street and 15 feet on a narrow street before rising to its maximum height of 70 feet, or 75 feet if providing a QGF. To preserve the traditional streetscape, the street wall of a new building can be no closer to the street line than any adjacent street wall, but need not be farther than 10 feet.

Additionally, in the subject property known as 145-01 & 145-03 Jamaica Avenue in which affordable housing will be developed, the Zoning Resolutions allow for an increase in the FAR to a maximum of 3.60 FAR. Known as “Inclusionary Housing” under the Zoning Resolution, the Inclusionary Housing Program gives incentives in exchange for the creation of preservation of affordable housing, pursuant to Article II, Chapter 3, Section 23-154(b). Pursuant to Article II, Chapter 4, Section 24-35 related to R6 districts, no side yards are required and in Section 24-36 of the same Article and Chapter, no less than 30 feet rear yard setbacks are required.

Below is an illustration of the setbacks and height restrictions:

R6A Regulations

Zoning Application Process:

The process for changing the designated zoning on a lot within a district can be a very long process in NYC and can take up to twelve months to complete. The basic process and time required are detailed below:

· Start with Initial Analysis of Current Lot(s) : Prior to beginning the process of making a change to the designated zoning on a particular lot, a thorough analysis must be completed on the lot to understand what the lot is currently zoning and the structures allowed to be built on the lot pursuant to the zoning. The analysis can be done by reviewing various zoning websites and materials including Zola, Zola Handbook and Zoning Resolution. Additional help can be provided by representatives of the NYC Zoning and Planning Department.

· Informational Meetings & Pre-Application Process: A meeting must be scheduled with the designated borough office to discuss the scope of the project that is being proposed for the subject lot. Prior to the meeting a checklist will be provided that details the materials that should be obtained for the meeting. Additionally, a Pre-Application Statement must be completed which details the proposed project. Further, an Interdivisional Meeting with an assigned Department of City Planning (“DCP”) staff member will be an opportunity to present the proposed project. Moreover, once reviewed by DCP, a Reasonable Worst Case Development Scenario (RWCDS) memo will be issued by the City Planning Department which is an analysis framework used to determine the required environmental process that must be completed by the proposed sponsor inquiring to make a change/amendment to the designated zoning for the subject property.

1. ULURP Application & Environmental Impact Statement and Certification of Application: After the initial meeting and pre-application process, the sponsor of the project begins to prepare an environmental impact statement, which details how the project would affect its surroundings. The submission of an environmental impact statement is a requirement pursuant to the State Environment Quality Review Act (SEQRA) of 1975 and the City Environmental Quality Review (CEQR) are the City rules through which NYC implements SEQRA. The purpose of CEQR is to review the statement to identify any potential adverse environmental effects of proposed actions, assesses their significance, and proposes measures to eliminate or mitigate significant impacts. The draft of the environmental impact statement and the draft of the Land Use Application, together with all attached materials, will go through the Uniform Land Use Review Procedure (ULURP) process. The environmental impact statement and ULURP application is reviewed by the City Planning Commission (CPC), who have the Department of City Planning (DCP) as staff.

a. Copies of the impact statement, land use application and materials are sent to the Borough President, Community Board and the City Council within five (5) business days of the receipt of the application.

b. Comments by the CPC and DCP staff are reverted back to the sponsor of the project for correction/updating. Comments can include requested certain changes to the application, documents, or reports submitted.

c. Once the application has been reviewed and subsequently revised pursuant to all comments, the application is then certified as being approved to then be able to move on to the next step in the process (note: if after six (6) months, the application has not yet been approved to move to the next steps, a sponsor can submit an appeal to the CPC).

2. Community Board Review: After the application has been certified as approved, the local community board has two (2) months to review the application. The community board will notify the public by holding a public hearing. Then submits their recommendations to CPC and the Borough President. If after two months the community board does not submit any recommendations, the application will continue to move to the next stage in the process.

3. Borough President Review: Once the application has moved past the Community Board Review, it then moves on to the Borough President for review. The Borough President will have one (1) month to submit his or her recommendations to CPC. A public hearing is not required at this stage but a Borough President can still choose to hold a hearing regardless.

4. City Planning Commission Review: Once the application has moved past the Borough President, CPC has two (2) months to hold a public hearing and ultimately make a decision to either approve the plan, approve it with modifications or disapprove it. If the plan is not approved, then the project ends there (unless it is an urban renewal plan, in which case it still gets reviewed by the City Council). If the plan is instead approved by CPC, it moves on to the City Council:

· Note that when either the Community Board of the Borough President, during their respective review periods, submit recommendations, those recommendations can only pass if there is a consensus between at least seven commissioners. If however the Borough President recommends to disapprove a plan for example, the vote requires nine commissioners to agree.

5. City Council Review: The City Council will have fifty (50) days to hold a public hearing and make a decision. Note that not every application will need to be reviewed by the City Council. Certain instances require the City Council review and in others it does not (example: changes to the zoning map, zoning text changes, housing and urban renewal plans, disposition of residential buildings or 197-a plans all require City Council review). Also, the City Council will have to review if a plan is disapproved by the Community Board or the Borough President.

· The City Council can also submit a recommendation (to approve, approve with modifications or disapprove) even if a plan was approved by either the Community Board, Borough President or CPC. If the City Council approves with modifications, CPC has fifteen (15) days to recommend whether the modifications require another environmental impact review.

6. Mayoral Review: The Mayor has five (5) days to veto a plan that has, for example, been approved by the City Council. Although under the Mayor Review, he or she does not need to formally approve the plan and the City Council and override the mayor’s decision with a 2/3 vote.

Below is a flow chart of the process of the application as it moves through the various departments, boards and offices:

Building Code Violations & Certificate of Occupancy Review:

Information was obtained from the NYC Department of Buildings’ Information System website regarding violation status and issuance of Certificates of Occupancy (CofO) for the subject properties. This site lists complaints, Department of Buildings (DOB) violations and Environmental Control Board (ECB) violations as well as the status of the issuance of CofO. Complaint details are available online as well as printing copies of CofO, while actual violations must be viewed by completing a written Request for Information. The following information was obtained for each property:

* None Available - No Certificate of Occupancy was located for 144-35 Jamaica Avenue. The subject property was built in 1931 and requirements for a Certificate of Occupancy took effect in 1938. A Letter of No Objection (“LNO”) will need to be obtained. Required documents for issuance of a LNO include i. Sanborn Map; ii. Survey; iii. Pictures of the exterior & interior of premises; iv. HPD I-Card; & v. Premises must have no open job applications/no open violations. The estimated review period for the issuance of an LNO is about 10 to 15 days.

Chapter 3 - 1 UNIQUE CHALLENGES

There are two unique challenges that have been identified while constructing the capital stack model and reviewing the financial statements.

Unique Challenge 1

After analysis of the project and available financing, a construction loan with a 60% LTC and proposed 5.7% interest rate will be obtained. The construction loan will require a 40% equity investment. In order to reduce the equity investment, we proposed to incorporate 20% LTC mezzanine financing into the capital stack model. Given the priority position of mezzanine financing, this type of capital requires slightly higher interest rates than the senior construction loan. As a result of the projected NOI returns, acquisition costs, construction interest rate and investor rate of returns, incorporating the additional costs associated with mezzanine financing was a challenge but necessary in order to move forward on the projected analysis.

Unique Challenge 2

An additional unique challenge that this particular site proposal encounters is maintaining and adding lower-cost housing options. Costs for construction materials and land continue to rise, finding a way to pay for affordable developments is becoming much more difficult. Due to the fact that lenders base their loans on a property’s anticipated income, when the rent is adjusted to accommodate affordable prices and a property’s expected income drops, so does the amount of money lenders are willing to provide. This is where a funding gap will occur and so poses the challenges.

The capital stack for an affordable housing project usually includes a conventional mortgage loan, tax credits, and several other sources of funds, like alternative financing or grants from public or private sources. As developers, we don’t want to have too many financing sources to fill the gap between building costs and capital available.

Possible solutions to the posed challenges include exploring affordable housing funding sources including low-income housing tax credit (LIHTC). The Department of Housing and Urban Development (HUD) created this program to incentivize affordable housing development. LIHTC provides credits to state housing finance agencies to allocate to developers, who in turn typically sell them to investors to fund the project. There are two types of LIHTC credits—9% credits and 4% credits—and being awarded a 9% credit will help to finance the majority of a development.

Another program is the Community Development Block Grant. This federal program provides funds to state and local governments to distribute for community development projects. To receive these funds, local governments must submit two annual performance evaluation reports to HUD.

Lastly 221(d)(4) is HUD’s construction loan program for both affordable and market-rate housing. These loans are sizable—typically more than $10M—and unlike conventional bank financing, the terms won’t change with the market. Developers pay interest-only during construction years, which gives up to three additional years of financing at the same fixed rate. 221(d)(4)s are often more expensive for developers up front and can take up to a year to secure because the FHA lender and HUD each underwrite the transaction. These solutions can potentially assist in the unique challenge of the burden of identifying funding sources and managing affordable housing finance that falls on the developer.

Chapter 4: FINAL ANALYSIS AND PROFORMA

To determine whether or not our proposed vision for this portfolio assemblage is viable a complex and dynamic financial model needed to be constructed. The investment thesis followed an extremely conservative approach. The model consists of seven sections:

1. Assumptions for Sources and Uses

2. Sources and Uses

3. Assumptions for Cash Flow

4. Cash Flow

5. Yield Analysis

6. Debt Sizing

7. Highest and Best Use

In the model the total sources of funds to equal $9,004,289.08. This total project cost consists of a portfolio acquisition, hard and soft costs as well as additional equity needed to fund point fees, interest reserves, contingency and working capital. Our total debt is provided by an interest only construction loan of $4,785,669 anda Mezzanine Loan of $1,595,223. The remaining TPC is covered by $2,623,397 of equity, with 90% coming from sponsors.

The property will include four revenue streams.

1. An urgent care facility which produces an annual stabilized base rent of $75,263

2. Medical Offices which will generate $256,827 of annual revenue

3. Residential which generates $68,880 annually

4. Retail which generates $134,268 annually

The urgent care and medical office properties will be triple net leases.

Construction/renovation will take two years. In that time interest reserves will cover interest generated by the loans. The third year will see income generation, but at a 75% capacity of expected revenue, so working capital will be necessary to fill a deficit. The following two years will be stabilized and a NOI of $477,743 and $480,899 are expected. A cash on cash return of 1.52% and 1.64% are also expected. Year 5 NOI is expected to be $484,078 and is the basis of our exit projections.

Chapter 4-1: EXIT PLAN

Assuming the project construction and renovations commence and are completed at the end of Year 1, the exit will be based off of Year 5 NOI and an exit capitalization rate of 10.83%. The exit capitalization rate is calculated through the band of investment method plus a spread. To get the base capitalization rate, the NCREIF return index of 7.16% was multiplied by the weight of TPC equity of 29%, plus the blended cost of debt multiplied by debt's portion of TPC. The result is 6.83% and a spread of 400 bps is added for the risk incurred.

According to the models projections the Year 5 NOI may not be value of the building may not be enough to support the debt required to take out the construction loans. If the project were to commence, additional equity would need to be raised.

Chapter 4-2: SENSITIVITY ANALYSIS

By dividing the Year 5 NOI by TPC this project produces a stabilized yield of 5.83%. Using additional increments of $10,000 for NOI and $146,327 for TPC there is very little room left for error to drop below the stabilized yield of 5.38%. Furthermore, this yield analysis suggests to reach the required capitalization rate of 10.83%, the required NOI would need to be $975,527 or the TPC would need to be$4,468,127 to achieve our required return or the risk.

Further asserting this position a highest and best use scenario shows even with a tremendously small return on investment and recapture rate of 1% with our capitalization rate of 10.83%, the property value based on Year 5 NOI would only be $3,638,365, nearly $200,000 less than the cost to acquire the properties without a broker fee.

Unfortunately, all signs signal this project is not financially feasible under these assumptions.

Resource Links & Information

Economic Research Service

https://www.ers.usda.gov/data-products/creative-class-county-codes/

Block and Lot

https://a836-pts-access.nyc.gov/care/search/commonsearch.aspx?mode=address

Acris

https://a836-acris.nyc.gov/CP/

NYC Buildings (DOB Certificate of Occupancy)

https://www1.nyc.gov/site/buildings/index.page

NYC Community District Profiles

https://communityprofiles.planning.nyc.gov/queens/12