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Keeping Naysayers At Bay, Long Island Learns To Build Up Instead Of Out

It’s home to Levittown, the prototype of the postwar American suburb, but Long Island’s coming around to denser development. But, as panelists at Bisnow's first-ever Long Island State of the Market event pointed out, not everyone’s on board. 

HFF senior managing director Jose Cruz and Mill Creek Residential Trust development associate Nick Halstead

HFF’s Jose Cruz (with the mic) put it pretty simply: “Transit-oriented development is at the top of everybody’s wish list. The buzzwords fly. But there’s still no guarantee it’s gonna work.”

One big reason it doesn’t always work: uncertainty. Mill Creek Residential’s Nick Halstead (right) said in his firm’s 150- to 200-unit “sweet spot,” a well-located site doesn’t usually come to you right out of the box.

It often means putting together an assemblage, where a developer might have to put nine sites together. Nick says it’s not necessarily a big deal to overpay for those sites, if an upzoning is in the offing, but not every municipality can give developers a clear answer on whether they’ll get it.


There are, of course, those who’ll do what they can to make sure higher-density development doesn’t get built. AvalonBay Communities' Matthew Whalen recalled the scene when he went to a town hearing to explain the plan for a rental development in Huntington.

A helicopter hovered overhead. “I parked my car and I’m walking to town hall, and I’m thinking ‘I’m gonna get beat up for three hours.’”

He said about 400 residents packed into the town hall. The development, which opened in 2014, was ultimately scaled back from 490 to 379 units, with 43 of those set aside as affordable.

Sometimes, Matthew noted, community pushback can end up in the courts, and it has the potential to be the kiss of death for a project. He mentioned Article 78, a provision in state law that allows opponents of projects to file appeals to stall or stop a project.

By Matthew’s math, Article 78 suits can add 12 to 18 months to a project’s timetable.

While normally, the appeals get tossed and projects get back on track, Matthew raises the question: What if the economy goes south during that time?

A worst-case, he says, is investors lose interest in the deal and the thing falls apart. Matthew said he and others are pushing for reforms to the law so those using it will have to face some significant financial stakes—beyond some legal fees—when they put development projects at risk by making use of it.


NIMBYism was front of mind for Ed Blumenfeld of Blumenfeld Development Group (he's on the left, above).

“When I was growing up, Long Island was known for growing potatoes,” he said. “Now we grow and export NIMBYism.”

With rising costs for municipal services, local tax bases only grow, Ed reasons, in basically just two ways: higher taxes and new development. Cities and towns on the island are left with either cutting services or raising taxes if development isn’t going to be allowed.

Municipalities like Oyster Bay have decided density isn't for them, and as Ed and others noted, they're now paying the price through things like hits to their bond ratings

Ed says politicians and civil servants that are “smarter” would hold much of the key to solving this. Moderator Lisa Knee of Eisner Amper (speaking) noted that the reverse commute by car on Long Island’s highways seems to be picking up, suggesting more workers living in the city and working on Long Island.

But CBRE's Phil Heilpern (between Ed and Kimco's Josh Weinkranz) pointed out that even though some of them are driving, those tenants want to be near transit lines.

“If they’re going to commute to Long Island from the city, it has to be easy for them,” he said.

With very little office inventory near transit lines, that could be a liability for Long Island’s ability to attract a young workforce. And, as Phil pointed out, there’s not much speculative office product coming, so the vacancy rate of around 10% is likely to keep inching downward.

While not much office is getting built on Long Island, multifamily development looks to be turning a corner on Queens and Brooklyn's eastern neighbor.

Case in point: In 2009, Matthew said AvalonBay started one $75M project. This year, he said, the firm has started close to $2B in development projects. But for a guy whose firm has been reaping the rewards of the ongoing boom, he wouldn’t be too sad to see it end.

“I’m sort of looking forward to another cycle,” he said, citing the ever-increasing cost of development. “The yachts at the marina are all the contractors’ now.”


The event kicked off with a keynote on the Nassau Coliseum by Forest City Ratner's Rebecca D'Eloia. She broke down the upgrades her team is making to the facility, which originally opened in 1972. It'll have new food service areas, a more spacious concourse, and double the number of bathrooms with attention paid to giving women a bigger share of the bathroom space than before ('bout time). The focus will be to make the building an architectural icon that will serve as a top-flight entertainment and concert venue.

The redevelopment hasn't been met with the same kind of naysaying as some of Long Island's mixed-use development, but Islanders fans have been less than pleased about making the trek to the Barclays Center, which Rebecca also worked on, to see their team. Fans even went as far as to vote out Nassau County's former DA, Kate Murray, reportedly on the grounds that as Town of Hempstead Supervisor, she helped make the team's move to Brooklyn possible.

The revamped arena will have a reduction in seats to 13,800, making it too small to host the team, so calls to bring the Isles back to Nassau County look like they will go unmet. 


The office and retail panel was moderated by Roux Associates' Joshua Levine.