The development group behind a $1.5 billion project in New York City’s Lower East Side has secured the construction financing needed to move forward with the site’s largest building.
Delancey Street Associates closed a deal for a $200 million construction loan from Wells Fargo & Co. and M&T Bank , allowing the group to proceed with the 26-story tower at 180 Broome St. that is part of Essex Crossing, a development decades in the making.
The $300 million mixed-use tower will house 175,000 square feet of office space, 263 market-rate and affordable rental apartments as well as a portion of Market Line, a 150,000-square-foot market expected to feature 150 merchants. Construction, which also will be funded by Delancey Street Associates, is expected to begin this month with an opening anticipated in 2020.
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“With this one, we will have basically three-fourths of the site’s square footage under construction,” said Isaac Henderson, a director at L+M Development Partners Inc., which is part of Delancey Street Associates. “Of our commitment of affordable [apartments], all but 35 units will be under construction.”
When the entire Essex Crossing is completed, the development will have nine buildings with more than 1,000 apartments, of which more than half will be designated affordable. And the project will bring 450,000 square feet of retail space and 350,000 square feet of office space. The project is significant not only because it represents the city’s decades-old urban renewal effort to transform blighted and mostly vacant lots, but also because it will inject a significant amount of office space into an area where relatively little exists.
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This year the partnership, which includes Taconic Investment Partners LLC, BFC Partners, Goldman Sachs Urban Investment Group, a division of Goldman Sachs Group Inc., and others, expects to complete all of the first four buildings that are part of phase one. A Trader Joe’s supermarket and a Target store are among the retail tenants slated to open in the development.
The 26-story tower at 180 Broome St. will include 10,000 square feet of retail space and rental units on floors 6-26. The office portion will have bicycle rooms, showers, outdoor terraces and event spaces within its atrium. The building’s lower level will house a segment of Market Line, a bazaar-like marketplace that will connect with the new home of the 77-year-old Essex Street Market.
Write to Keiko Morris at Keiko.Morris@wsj.com