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Amazon Developer Bought $300M Long Island Site Days Before HQ2 Announcement

Long Island City from Manhattan

TF Cornerstone — the company tapped to develop Amazon’s new HQ2 on the Long Island City waterfront — has reportedly picked up a $300M development site nearby.

The firm is buying the 326K SF block at 55-01 Second St., the New York Post reports, and signed the contract for the purchase a few days before Amazon announced it had selected Long Island City for the new campus

The price for the site works out to be $187.50 per buildable SF, according to the Post, and the site has 54th Avenue on the north side and Vernon Boulevard on the east. TF Cornerstone could build more than 2,000 rental units across four towers. 

The Elghanayan family, which controls TF Cornerstone, is already building 1,200 apartments nearby at Hunter’s Point South, and has developed more apartment buildings during Long Island City's building boom than any other. Much of the land where Amazon will build its office campus was previously slated for residential development.

Amazon will lease the 672K SF 44-36 Vernon Blvd., owned by the New York City Department of Education, in 2019. It will also lease 1M SF at One Court Square, the blue skyscraper in the distance.

The 8-acre development site is blocks away from where Amazon plans to build at least 4M SF across six privately and publicly owned sites. TF Cornerstone owns one of the HQ2 sites, but Amazon has tapped it to develop all of the properties in HQ2, including the ones owned by the city and Plaxall Realty, the Post reports.

The tech giant was given nearly $2B in tax subsidies from New York state to come to the city. Amazon will also be applying for as-of-right incentives, including New York City’s Industrial & Commercial Abatement Program and the Relocation and Employment Assistance Program.

The site also falls within a federally designated opportunity zone, raising questions as to whether or not Amazon could apply for more tax breaks.

The timing of the purchase could come into question. Amazon required the parties it negotiated with to sign ironclad nondisclosure agreements, but TF Cornerstone appeared to use that to its advantage: when Newmark Knight Frank brokers brought the site to market in 2017, it had advertised a sale price of $320M.

TF Cornerstone will still have to make a third of the rental units affordable if it develops by-right, but land around HQ2 is expected to start selling at a premium. By putting the parcel under contract at the same time as the HQ2 decision was announced, the Elghanayan family looks like it was able to score it at a discount.

Related Topics: TF Cornerstone, Amazon HQ2