It’s a black hole of development.
An 11,432-square-foot lot in SoHo on Sixth Avenue between Spring and Broome streets has sat fallow for six years, growing tall weeds behind barbed wire while it gets flipped by developer after developer who never break ground.
The star-crossed tract in prime SoHo is something of a real-estate mystery: How can valuable space in a crowded city sit vacant for years on end?
In 2008, developer Joseph Mattone secured city permits to develop a 19-story hotel on the barren site that sits a block from high-end boutiques like John Masters Organics and multimillion-dollar condos at Trump SoHo.
Mattone had owned the property for years and leased it to a Mobil gas station that went out of business in 2006. When he was offered $33.5 million for the undeveloped land in 2008, he couldn’t refuse.
“It’s a disadvantaged site for development because it’s zoned for manufacturing, and right next to it is what we call ‘Trump zoning,’ ” said Mattone, referring to the 46-story Trump SoHo hotel at Spring and Varick streets, one block over. Donald Trump procured special zoning for his flashy high-rise hotel, which neighborhood activists thought was a violation of zoning rules.
On the vacant Sixth Avenue lot, a zoning variance could be secured for only the 19-story building and not a bigger one. A larger high-rise hotel, like Trump’s, would require rezoning and entail a neighborhood battle.
“The lot doesn’t have equal zoning to the areas around it. This piece for some arbitrary reason was zoned for less-intensive development. We were going through a proceeding to build when we were approached by a buyer and decided to go elsewhere,” Mattone said.
The new owner, who bought the property under the name of an LLC, sat on the depressed lot for two years before unloading it at a loss for $20.25 million in 2010 to the LA-based CIM Group, which was rumored to be eyeing the site for a glitzy hotel.
But last month, the sad plot switched hands again before any blueprints were unveiled. Developer Robert Gladstone of Madison Equities spent $30.5 million for it.
“We have nothing to report at this time,” Gladstone said of his plans.
Approved permits for a 19-story hotel remain active at the Buildings Department through April 2013, a city spokeswoman said.
The ugly lot even irks residents who usually fight new development in the historic district. “It’s a vacant, grungy, weed-filled lot, à la South Bronx 1976, in the middle of one of the city’s most visited, prosperous and trendy districts,” fumed Sean Sweeney, director of the SoHo Alliance.
“From our perspective, the lot looks awful and we’d be happy to see it developed,” said Andrew Berman, executive director of the Greenwich Village Society for Historic Preservation.
The empty lot “shows the inherent risk in development, a risk that only increased following the financial crisis of 2008,” said Mike Slattery, senior vice president of the Real Estate Board of New York. “The current zoning no longer reflects the land use in this area. It is no longer a manufacturing district. However, zoning changes, especially when changing from manufacturing to a more suitable land-use regulation, are costly and never certain.”
Butthe weedy patch retains its value even though it never becomes a construction site.
“I’d be very happy to buy it back,” Mattone said. “We might need some help in getting rezoning but I’d be very happy to try again and develop that piece of Manhattan.”