Lawyers for a development company controlled by the son of bankrupt builder Seán Dunne have told the city's planners that a profit of $653,000 (€477,000) would not be a feasible return on a new New York City property.
New filings submitted on behalf of TJD21, John Dunne’s New York company, say a building proposed for a vacant site in the fashionable Soho district of Manhattan “would never be developed on this site” if the planners insisted on a 9.1m yard being left at the rear of the building.
At a public hearing last month the city’s Board of Standards and Appeals raised concerns about the size of the backyard proposed by the company for a new five-storey building at 74 Grand Street and that balconies to the rear of the building submitted in the plans would cut off light and air.
The company submitted revised plans for the property last week rejecting the board’s suggestion for a larger yard on the basis that this would cost $18.1 million to build and value the project at $18.8 million which, the firm’s lawyers said, would not generate a feasible return from the venture.
Six-metre yard
The developer is instead proposing to construct the building, which comprises four apartments and shop space on the ground floor, with a 6m backyard and no balconies to the rear.
The company estimates it would make a profit of $3 million given that this variation of the building would cost $18.5 million to build and generate a net project value of $21.5 million.
Judith Gallent, a lawyer with the firm Bryan Cave, for the company, told the board's chairman, Meenakshi Srinivasan, in a letter dated April 1st that this was "the only viable development of the site".
Property consultants used by Mr Dunne’s company estimated the proposed building would require a construction loan of $13.5 million to build the five-storey building.
The company estimates the penthouse apartment in the building would be priced at $7.7 million with another at $4.7 million and two at $3.3 million, all valued at more than $2,000 a square foot.
P
ublic hearing
The city's planners will hold another public hearing about the project tomorrow. The earliest a decision could be made on the plans for the property is the end of this month.
Seán Dunne, who filed for bankruptcy in the US last year with debts of $942 million, told his creditors at a meeting in Connecticut last December that he had an involvement in the Soho project. He said that his son and his wife, Gayle Killilea Dunne, have an ownership interest in the property in the Soho district, which was purchased last year for almost $5 million.
Mr Dunne said that his wife provided some of the finance to purchase the property.
