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Soloviev's Big Bet: Affordable Housing Puts the Odds in Favor of Manhattan's Casino Proposal

Stefan Soloviev is strategically bolstering his proposed casino project in Manhattan by offering a significant number of affordable housing units, contingent on securing a gaming license.

New York City Skyline

The Soloviev Group has overhauled its casino proposal for Midtown East, just south of the U.N., now encompassing 1,325 apartments, with a remarkable 40 percent earmarked for affordable housing, as reported by the New York Times. These 513 below-market rental units will be accessible to households with an average income at 80 percent of the area's median income.

Michael Hershman, CEO of Soloviev, elucidated that the viability of affordable housing hinges on integrating the casino component. Developers argue that the expiration of the 421a tax break has rendered high property taxes on rentals economically challenging, and the casino is perceived as a solution to replace this subsidy.

The introduction of income-restricted apartments primarily serves to secure local support, a pivotal factor in the competition for up to three downstate casino licenses, two of which might be designated for existing racinos in Queens and Yonkers. Initially, the local community board had rejected any casino plans for the district where Soloviev's extensive undeveloped site is situated. However, the inclusion of affordable units could potentially sway the board's perspective, particularly since the district added only a modest 356 such units from 2010 to 2020, according to data from the Furman Center.

Several downstate casino proposals have been made public, with many incorporating affordable housing elements. For instance, Silverstein Properties' proposal for the Far West Side includes approximately 100 affordable units. In another example, Related Companies' $10 billion plan for the Western Yards section of Hudson Yards features a 1-million-square-foot apartment building with 329 affordable units.

Soloviev's vision for the vacant seven-acre site on First Avenue, situated between East 38th and East 41st streets, is expansive. It encompasses a 1,200-room hotel, retail and restaurant spaces, a democracy museum, and nearly five acres of green space along the East River, accessible to the public. Notably, the project abandoned its plans for a Ferris wheel after encountering disapproval from community members.

The development is being crafted by the Bjarke Ingels Group, and Soloviev is partnering with Mohegan on the project, which could potentially commence construction in 2025 if the gaming license is secured and zoning is approved. It's important to mention that Stefan Soloviev's late father, Sheldon Solow, had previously obtained approval to construct exclusively market-rate housing on the former ConEd site, and this agreement remains in force, according to the statement from the firm to the Times.


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