Giant Project Innovation QNS Dead, But Smaller Ones Planned

11 minutes read

The megaproject known as Innovation QNS will not happen, but the controversial rezoning that allowed it seems likely to yield a number of smaller developments. One, at least.

The team of developers that planned the five-site, 3,200-unit Innovation QNS has broken up since the November 2022 rezoning was approved by the City Council.

Silverstein Properties is out, and a second member of the development trio, BedRock Real Estate Partners, is moving ahead on one of the two Long Island City sites it controls with a subsidiary of L+M Development Partners. The two firms formed a joint venture last summer.

BedRock, led by Chuck Berman and Tracey Appelbaum, and Ron Moelis’ L+M, run by CEO Lisa Gomez, filed plans Friday for a 560-unit, 498,000-square-foot, mixed-income building at 35-18 Steinway Street, with Beyer Blinder Belle as the architect.

BedRock and L+M entity LMXD, led by David Dishy, aim to match the affordable housing framework — 45 percent of units affordable, including 15 percent for households earning 30 percent of the area median income, on average — of the rezoning agreement reached by the original development team, which included Kaufman Astoria Studios. Such deep affordability would require subsidies.

At a minimum, multifamily projects that take advantage of the rezoning must set aside 25 percent of units for households earning, on average, 60 percent of the area median income, under the Mandatory Inclusionary Zoning law.

A spokesperson for the joint BedRock/LMXD venture said it is “looking forward to working with the city to deliver additional affordable housing that reflects the goal of the original project’s Ulurp approval.”

At 560 units, the Steinway Street project is among the largest planned under the state’s 485x tax abatement. It would be obliged to pay construction and building service workers an average of $40 an hour, according to the terms of the abatement.

Scoring financing could be a challenge for BedRock and LMXD. Most 485x projects filed have been 99 units or fewer to avoid the wage floor, and few, if any of them, have scored construction loans.

The original Innovation QNS team dissolved as the agendas of its members changed. Silverstein and its CEO, Marty Burger, went their separate ways in October 2023 in part because founder Larry Silverstein and his daughter, Lisa Silverstein, who took the reins at the firm, did not want to start large, new projects beyond 2 World Trade Center, 5 World Trade Center and its Manhattan casino bid.

A Silverstein spokesperson said the firm decided not to pursue Innovation QNS for multiple reasons, including uncertainty about multifamily development tax policy after the state let 421a expire in June 2022.

A year before the rezoning, Hackman Capital Partners and Square Mile Capital Management acquired Kaufman Astoria’s century-old, landmarked property at 34-12 36th Street. Silverstein was a rival bidder. The reported $600 million deal was a studio space play, unlike Innovation QNS, which was largely a multifamily project.

The demise of the $2 billion Innovation QNS raises the question of how the project-wide commitments made in the original development team’s deal with the City Council will be applied to individual projects on the five development sites.