Last unit (a penthouse) again up for sale at 550 Vanderbilt, with tiny price cut to $4.995M (after earlier price cut). A huge tax break. More marketing b.s.

With all but one of the 278 units (which include a super's apartment) finally sold, the developers of 550 Vanderbilt (B11), the only condo building so far in the Atlantic Yards/Pacific Park project, are putting Penthouse East back up for sale.

The price: $4,995,000, for 7 rooms, including 3 beds and 3.5 baths. The StreetEasy listing indicates that it had been listed 10/2/19 for $5,000,000, then taken off the market less than six months later.

So that tiny price change is just for marketing.

However, as I wrote last December when citing the sales of the first of the three penthouses, this unit was initially marketed for $5,805,000. So that's a significant cut in the sticker price.

The unit was built by Greenland Forest City Partners, with Greenland USA having a 70% share in the building. Later, after the joint venture built three towers, Greenland bought out all but 5% of Forest City's interest in the project going forward.

A huge tax break

Notice that monthly taxes, highlighted in the screenshot above right in the bottom left corner, are $94!

The 421-a tax break was expanded for this building thanks to a questionable, if legal, maneuver.

According to the excerpt below from the Offering Plan, owners of PHE--first in the list of three penthouses at the bottom of the list--would have had to pay $3,585.38/month and $43,024.55/year without the initial 15-year tax abatement, as shown in the red column.

Instead, that initial abatement lowered taxes to $2,674.11/month and $32,089.29/year, as shown in the pink column. That's a 25.4% annual discount.

2015 Offering Plan

However, as I reported in 2017 for City Limits, the developers were somehow able to pair this building with the distant--separated by two parcels--535 Carlton "100% affordable" building into a single affordable project, thus gaining a more significant 25-year tax break.

As shown in the excerpt below from the September 2021 document, PHE was estimated to pay just $94.19/month and $1,130.28/year with the abatement. That's an enormous discount: 97.4% off the estimated annual $43,024.55/year without any abatement, and 96.4% off the initial abatement of $32,089.29/year. That significantly lowers the cost of ownership.

September 2021 estimate

Note: those numbers probably should be adjusted slightly, given that the estimated monthly taxes for this unit are now $97/month.

The marketing b.s.

As shown in the screenshot at right, the biggest marketing claim, not surprisingly, is that 25-year tax abatement. 

But Nest Seekers International/SERHANT continue their fantasyland marketing:

550 Vanderbilt is the first residential building to open in Pacific Park Brooklyn, the revolutionary new Frank Gehry designed 22-acre project coming to Prospect Heights. Through the masterful vision of COOKFOX, 550 Vanderbilt offers the inaugural opportunity to live and own in New Yorks newest park. With 350,000 square feet dedicated entirely to park space, childrens play areas, open lawns, basketball courts, dog runs, and more, this is unlike any living experience New York has ever seen.

That is not close to true, on several counts.

The first residential building to open was 461 Dean Street (B2), a rental building, in November/December 2016. The first closings at 550 Vanderbilt didn't surface until March 2017, and that preceded move-ins.

Gehry is responsible for the master plan, but he did not, of course, end up designing any of the buildings.

This is not "New Yorks [sic] newest park," because the 8 acres of open space, especially the section bordering 550 Vanderbilt to the north, won't exist until the project is finished, and that requires covering the second block of the railyard--stay tuned to see if that ever happens.