New York construction industry could lose billions as it struggles to finish projects amid coronavirus crisis
New York sports an abundance of magnificent infrastructure and architecture. The city that never sleeps is especially famous for its impressive condominiums and skyscrapers, mostly residential and occupied by affluent New Yorkers. Many projects for similar tall and grandiose constructions have been underway, but now with the raging coronavirus pandemic plaguing the worst-affected city in the United States, their fate is undetermined.
One such skyscraper, 111 West 57th Street, an ambitious project from SHoP Architects, is facing the same plight. The luxury structure with apartments worth at least $59 million, could remain desolate as the lockdown imposed due to the contagion has stopped all construction.
Real estate developers in New York are growing increasingly worried because the shutdown which has turned cities into ghost towns amid the pandemic would potentially impact the industry as there will be no buyers investing in properties.
The strict social distancing measures put forth by the government have also forced all constructions that were in progress to be halted immediately.
Developers fear that the lockdown will prompt buyers to back out of agreed deals, and those that have already been signed could be dismissed by legal clauses that allowed buyers to walk away in case of delayed construction.
According to the Financial Times, most deals have an outside date, which enables buyers who have already made their purchase to recover their deposits if a building hasn't finished construction by the specified deadline.
Kevin Maloney, a veteran developer, said in an official statement to MEA WorldWide (MEAWW) that he believes buyers and developers will gradually come to a mutual understanding - but only after the magnitude of the crisis currently being faced by the city becomes clearer.
Despite that, he has anticipated damage that could linger awhile. “There’s going to be a bunch of failed projects throughout New York”, he said.
Maloney has navigated through the savings and loans crisis that emerged in the late 1980s and early 1990s, the 9/11 terror attacks as well as the 2008 economic recession, among other financial shocks.
He predicted that the construction of 111 West 57th Street will be completed. In a statement issued on April 8, Maloney confirmed that the residential tower has met the requirements for its occupancy certificate.
"111 West 57th Street has met all TCO requirements and we have scheduled closings to begin over the next two weeks. Our timeline has continued as planned, we are seeing additional interest as the building nears completion and are excited to welcome our first residents,” he asserted.
The residential tower, 111 West 57th Street, is one among the tallest and slimmest buildings in New York City boasting a height of 1,428 feet and 60 feet in width. As an innovative approach, its builders at SHoP, resorted to a very authentic material in its construction - terracotta.
"As a prominent new local and regional landmark, it bears a special responsibility to contribute meaningfully and elegantly to the shared skyline," the company website elaborates.
The skyscraper is second in line to the Central Park Tower, as the tallest residential building in the western hemisphere. It is also the heaviest building in the world, encompassing the total weight of over three-and-a-half Statues of Liberty, and also surpasses Taipei 101's 730-ton tuned mass damper.
About 60 of the condominium are priced at the starting rate of $15.5 million, with the penthouse listed for a whopping $59 million. So far, the projected total sellout totals to $1.45 billion. Being 60 feet wide, each floor takes up one apartment each and overlooks the picturesque Central Park. The views also stretch towards Harlem and New Jersey on one side, and southern Manhattan on the other. To prevent the slim infrastructure from wobbling when the heavy winds blow, the 82nd floor above the residential apartments uses two mass dampers worth 800 tons of steel.
Before the economic recession set in, affluent buyers were rushing to buy these multi-million-dollar apartments in the "Billionaires' Row", which is a name given to a set of ultra-luxury residential skyscrapers that are arrayed along the southern end of Central Park, Manhattan.
In November 2019, the Wall Street Journal reported that billionaire auto dealer, Michael Cantanucci, closed on a $50 million unit at 111 West 57 Street.
Before the spread of the deadly virus across the globe, many luxury projects in New York were already years behind schedule — courtesy shortage in labor and the equipment created by the building boom which had slowed construction.
The pandemic has now plummeted various economies and the fate of the world economy looks bleak. The recession, which is starting to set in, will possibly persist for long, experts have opined.
Death tolls are rising by thousands each day, particularly in Europe and the US, which doesn't seem to be promising any improvements in the coronavirus situation.
The city of Wuhan in China where the virus first broke out has been released from its 11-week lockdown. Many cities, however, are still battling the devastating impact of virus that has now claimed 80,000 lives, worldwide.
Among those countries that are the worst hit are Italy, Spain, France, and the US and are still struggling to impose measures and prioritize public safety.
Many economical sectors have been forced to lay off their employees in a matter of weeks, and the unemployed have to manage tight finances with stay-at-home orders in place.
The chief of the World Trade Organization, Roberto Azevedo, warned that with the economic forecasts pointing at a recession, it "may well be the deepest economic recession or downturn of our lifetimes".
The WTO said that the global trade growth for 2020 could fall by at least a third. According to the United Nations' International Labour Organization, a distressing 81% of the world's 3.3 billion workforce has been impacted by "the worst global crisis since the Second World War".
In Washington, the Democrats have demanded an additional $500 billion to tackle the crisis, which could further complicate the efforts to aid small businesses with monetary requirements.
There are now 81,803 confirmed cases in New York City alone, with 4,571 fatalities, according to John Hopkins University COVID-19 Tracker.