Penn South Mutual
New York, New York / Mutual Redevelopment Houses
The Mutual Redevelopment Houses (MRH), an affordable cooperative in Chelsea, NYC, retained WSQ to create a strategic real estate plan, MRH was facing significant capital infrastructure improvement costs which affected the complex’s quality of life and long-term plans. WSP evaluated the commercial districts for assemblage and development, and the residentially zoned property for its development potential, within established legal and contractual constraints.
Initially, WSQ created a long-term real estate plan for utilizing over one million square feet of air rights over four zoning lots for Penn South. The plan recommended distributing air rights in a way that would sufficiently augment the cooperative’s capital infrastructure fund without degrading its quality of life. This resulting summary provided a ranking development sites, balancing the client’s short-term financial needs with its long-term real estate plan. Using the long-term real estate plan as a guide. A preliminary financial analysis was completed for each, determining the land value and enabling MRH to better understand their risks.
Between 2020 and 2023, WSQ implemented one of the most significant recommendations in the MRH’s long-term real estate plan by issuing an RFP for the redevelopment of a commercial building at 335 8th Avenue. The RFP contemplated a ground lease structure open to various uses including residential with affordable housing. In early 2021, the woman-owned urban real estate company, MAG Partners, was selected to develop a 200‐unit mixed‐income rental building under the Affordable New York Program. WSQ assisted with negotiating the ground lease, which will provide Penn Southground rent payments, ultimately providing long-term financial support for the cooperative and ensuring that the complex remains affordable to its 5,000 residents in perpetuity. The transaction required extensive coordination with multiple city, state, and federal agencies including the New York City Department of Housing Preservation and Development (HPD) and the United States Department of Housing and Urban Development (HUD).