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Wall Street Journal / News - Politics

A Well-Intentioned City Redevelopment Plan Hits the Skids

In 2013, the New York city council approved a plan for a gleaming new development in the Willets Point section of Queens. Four years later, the project is stalled, and explanations vary for what went wrong.

By

Thomas MacMillan

In 2013, the New York city council approved a plan for a gleaming new development in the Willets Point section of Queens—a mall, a hotel, and hundreds of new apartments near Citi Field—and soon began helping a group of auto-repair shops that occupied the land move to a new home in the Bronx.

Four years later, the Willets Point development project is stalled, the Bronx landlord for the auto shops is about to evict them, and the $7.5 million the city has spent to assist the business owners appears to have been for naught.

“It’s a waste of the city’s money,” said Tom Angotti, an emeritus professor at the Urban Policy and Planning department of Hunter College. “But it’s also a waste of time and effort.”

Explanations vary for what went wrong in the relocation effort.

Members of the group of 45 auto-repair businesses, dubbed the Sunrise Cooperative, say their new landlord failed to disclose problems with the new building that have delayed construction on what was supposed to be a state-of-the-art car-repair facility. The landlord, David Smetana, didn’t respond to requests for comment.

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Mr. Angotti said the project should have had more support from the city. An official from the Economic Development Corp. said it gave millions of dollars and years of support to the project despite concerns that it wasn’t viable.

The Sunrise Cooperative formed in 2013, shortly after the Bloomberg administration moved forward with plans to redevelop Willets Point. Members of the group initially received $380,000 from the city, and later an additional $1.3 million from an Economic Development Corp. business relocation fund. They also received $5.8 million from the settlement of a lawsuit against the city.

While some of the businesses displaced from Willets Point set up shop individually elsewhere, Sunrise sought to relocate together to create an indoor car-repair mall with a variety of automotive services under a single roof.

“For 30 years in Willets Point we were like family,” said Marco Neira, president of the cooperative.

The group found an 80,000 square-foot warehouse on Leggett Avenue in the Hunts Point section of the Bronx and signed a lease in 2014.

Sunrise set about installing bays for mechanics, auto-body repair and painting, and cutting-edge systems for ventilation and recycling engine oil, Mr. Neira said.

“It was going to be a model for the world,” said Rigo Sinchi, one of the members of the cooperative.

But the cooperative also found the building needed expensive repairs, including rebuilding walls and columns, Mr. Neira said. As the work dragged on, Sunrise was still paying $80,000 rent each month. By the fall of 2016, Sunrise declared bankruptcy and stopped paying rent, owing $1 million to a contractor and more than $570,000 to the landlord, according to a bankruptcy filing.

It was an unfortunate but honest mistake, said Harvey Epstein, associate director of the Urban Justice Center, a legal advocacy group that represented the cooperative.

“There was no mismanagement,” he said. “When you start doing a project, there are cost overrides.…You just run out of money.”

The Economic Development Corp. tried to bail out the cooperative with the offer of an additional $2.4 million, but the landlord declined, an official said.

Mr. Neira said Sunrise expects an eviction notice as soon as Wednesday. The building remains empty, even though its conversion into an auto-repair mall is 95% complete, he said.

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