Jarmulowsky Bank Project Seeks $73.5 Million in Funding From Foreign Investor Program

jarmulowsky 9 orchard

The restoration of the historic Jarmulowsky Bank Building at 9 Orchard St. has been going on for years, and plans to open a new luxury hotel there have been shrouded in secrecy. So any tidbit concerning the project is of interest to us. Today we noticed a press release which offers a few clues about the financing of the hotel, sure to be one of the Lower East Side’s new hot spots.

It was put out by NES Financial, a firm that offers services to administer complex financial transactions. The property owner, DLJ Real Estate Capital Partners, is utilizing the EB-5 Program, which offers legal residency to people from other countries if they invest at least $500,000 in projects that create jobs.

The press release says, “the EB5 United (the program sponsor) and DLJ Real Estate Capital have partnered with Advantage America New York Regional Center to facilitate a $73.5 million EB-5 investment in Nine Orchard Street, toward a nearly $200 million total capital raise.”

According to an EB-5 flyer, “9 Orchard” has been accepting EB-5 investments since September of last year. It says the total project costs are a whopping $190 million. More than $100 million is coming directly from DLJ equity. The flyer talks up the Lower East Side as “one of New York’s hippest neighborhoods” with “more art galleries per capita than any other neighborhood in NYC.” It also notes that average apartment rents on the Lower East Side have increased 46% between 2012 and 2016.

9 Orchard St.

9 Orchard St.

The property at 54 Canal St./9 Orchard St. was purchased in 2011 by DLJ for $33 million. The city landmark has been undergoing a painstaking restoration, including the recreation of a 50-foot-high domed spire on the top of the building. The owners were set to go before Community Board 3 last year in their quest for multiple liquor licenses at 9 Orchard, but those appearances were cancelled.

The EB-5 program is controversial for a couple of reasons. When it was introduced by the federal government in 1990, EB-5 was meant to generate jobs in areas with high unemployment. In recent years, real estate developers have used the program to fund a large number of luxury projects in posh neighborhoods. Jared Kushner, the president’s son-in-law and senior advisor, has used EB-5 to finance some of his real estate ventures. Some of these dealings have reportedly come under scrutiny by federal investigators.

The Jarmulowsky Bank Building is Once Again a Hotel; Liquor Permits Requested

9 Orchard St.

9 Orchard St.

Here’s something to look forward to in September. We’re likely to learn more about plans by the owners of the Jarmulowsky Bank Building to open a hotel in the 12-story, landmark-protected property.

The property at 54 Canal St./9 Orchard St. was purchased in 2011 by DLJ Real Estate Capital Partners for $33 million. Local architect Ron Castellano has been overseeing a painstaking renovation of the building during the past several years. Earlier this month, a gigantic crane was brought in to hoist the framework for a 50-foot domed spire to the roof. Original plans called for a hotel, but DLJ shifted gears last year, floating the idea of leasing the building for offices and retail.

Now the hotel concept is back on. The development team planned to go before Community Board 3 in August, seeking support for a liquor license. The application has now been pulled. You can expect it to re-emerge in September.

According to sketchy information available on CB3’s website, a full liquor permit is being requested on behalf of Sixth Avenue Restaurant Management. That’s the LLC associated with L’Amico, the Italian-ish restaurant from Laurent Tourondel at the Eventi Hotel on 6th Avenue (at 30th Street). Tourondel’s publicist did not reply to a request for comment. The contact name on the application is Steven Carter, managing director at DLJ. The application indicates the restaurant or restaurants would include live music.

According to Department of Buildings records, the first floor of the hotel will include a restaurant and bar. There’s also a bar and lounge on the second floor. Hotel rooms are located on floors 3-12, and there’s an “accessory lounge” on the top floor.

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The Jarmulowsky is known as, “Nine Orchard Street” on DLJ’s website.  “The investment strategy,” the developers note, “is to complete an extensive rehabilitation to convert the property into an upscale, independent hotel.” Here’s more:

The neighborhood around the property is rapidly improving.  The property’s distinctive architectural character and full block presence allow for an impactful, authentic redevelopment.  DLJ RECP’s investment theme in Nine Orchard Street is similar to other properties in our portfolio – we identify underperforming assets in neighborhoods positioned for sustained growth.  In this case, we believe that our redevelopment of Nine Orchard Street will further catalyze the improvement of the surrounding neighborhood.

The surrounding neighborhood has, of course, changed a lot since DLJ purchased the Jarmulowsky Bank property six years ago. Division Street and Canal Street have become restaurant/nightlife hot spots. The SPaCE Block Association is active in this area and can be expected to weigh in on the proposed liquor license/licenses.

In a 2015 prospectus for foreign investors of an unrelated project, DLJ said the development costs for the Lower East Side building were $90 million. The deep-pocketed firm is sparing no expense to restore the Jarmulowsky to its former glory. That will likely count for something with the community board, but members of the liquor licensing committee are sure to have some tough questions for the applicants about the scale of their nightlife operations.

DLJ did not respond to our request for comment.

50-Foot Dome Moved Into Place on Roof of Jarmulowsky Bank Building


Have you noticed the prominent addition to the historic Jarmulowsky Bank Building on Orchard Street?

On Saturday, crews hoisted a giant dome and positioned it atop the 12-story building, which has been undergoing a painstaking restoration for several years. Until 1990, a grand 50-foot tall tempietto was the most distinguishing characteristic of the tower at 54 Canal St./9 Orchard St. A previous owner had removed the dome, but now it’s been re-fabricated and moved into position on the roof. Here are two photos taken by TLD reader Alexei Griebsch:

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image1 (2)

Here’s what the Landmarks Preservation Commission had to say about the dome in 2009 when the Jarmulowsky was designated as a NYC landmark:

The building’s rounded corner culminated, until the early 1990s, in a two-story-high circular pavilion with a round dome ringed by eagles and topped by a pinnacle, which was probably inspired by Athens’ Choragic Monument of Lysicrates (334 BC), the basis for New York’s Soldiers’ and Sailors’ Monument (Stoughton & Stoughton with Paul E.M. DuBoy, 1897-1902, a designated New York City Landmark) and for the crown of McKim, Mead & White’s Municipal Building of 1907-14 (a designated New York City Landmark). This feature accentuated the corner’s vertical thrust, affirming the building’s monumental status on the Lower East Side and drawing attention to it from Straus (then Rutgers) Square two blocks to the east, the neighborhood’s historic center of Jewish life.


jarmulowsky 4

jarmulowsky 1

The Jarmulowsky Bank Building is owned by DLJ Real Estate Partners. Plans have shifted back-and-forth in recent years for the property, which at various times has been the future site of a boutique hotel or an office building. The restoration is being overseen by local architect Ron Castellano.

Have a Look at the Detailed Plans For the Jarmulowsky Building’s New Dome

Jarmulowsky Owners Decide to Restore Large Dome Atop Hotel