The New York “Daily News” recently reported that Shaya Boymelgreen was planning to build a hotel in the center of the $2.5 billion Brooklyn Atlantic Yards project being constructed by US real estate tycoon Bruce Ratner. Boymelgreen, a Jewish-American, has been the regular partner of Africa-Israel Investments (TASE: AFIL) and its controlling shareholder, Lev Leviev, in US real estate projects since 2002.
Boymelgreen is planning to turn a former bakery at 800 Pacific St. into a 150-200-room hotel. “We’ve had a few talks with various hotel operators,” Boymelgreen spokesperson Will Kim told the “Daily News”.
Near the site of the planned hotel, Boymelgreen is also cooperating with Henry Weinstein in the conversion of an existing 85,000-square foot building and a vacant lot in the neighborhood into an office and residential complex.
These two buildings are slated for construction in the compound where Ratner plans to build seventeen residential and office high-rises, plus a 19,000-seat luxury basketball arena for the New Jersey Nets team in the National Basketball Association (NBA).
Ratner is planning his project on a 21-acre site, which includes the Long Island railroad yards. Although he has purchased a large proportion of the joint apartments and buildings project on the site of the planned Atlantic Yards, Ratner also needs approval from the local authorities to unfreeze a number of plots in the region for the planned development.
Ratner bought the New Jersey Nets last year for $300 million, and plans to move the team to the new arena to be constructed in Atlantic Yards. Bulldozers are scheduled to go into action on the site in 2006, but Ratner is still waiting for a few permits from the municipal and state authorities. Ratner has said that he would allocate 4,500 units in the project to rental housing, and half of the planned 375 apartments to low-cost housing.
Development activity by the Africa Israel-Boymelgreen partnership differs from almost all other Israeli overseas real estate investors. The partners initiate construction, while most other Israeli investors concentrate on buying existing properties as income-producing properties.
Boymelgreen and Leviev have built over 2,200 apartments in high-demand areas of New York City, at an estimated cost of at least $1.3 billion. Boymelgreen won a grant amounting to 2.5% of the investment in his joint projects with Africa-Israel in the US.
The partnership has hitherto operated mostly in New York through a series of joint corporations, each related to a specific project. Africa-Israel owns a 65% of these corporations, and Boymelgreen 35%.
Published by Globes [online], Israel business news - www.globes.co.il - on March 9, 2005