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Lendlease continues its efforts to withdraw or close its international work. This month, the company completed the sale of its New York and New Jersey business and reached an agreement with the city of San Francisco on a long-stalled project.
In May, the Australian-based developer and builder announced that it would exit from international construction and development during the following 18 months. The company said the move would free up A$4.5 billion ($3 billion), allowing it to focus on domestic operations.
As part of the process, Lendlease said it planned to divest from projects and eliminate regional management structures to reduce the number of full-time employees outside Australia by 1,400.
On Monday, Milford, Mass.-based Consigli Building Group announced that it had completed the purchase of substantial portions of Lendlease construction operations in New York and New Jersey.
The sale for an undisclosed amount includes a portfolio of 45 current projects, under construction and pre-construction valued at more than $1.8 billion, according to the statement. In addition, more than 400 Lendlease employees, the majority of the company’s American workforce, will transfer to Consigli.
In the statement, Consigli said the acquired workforce will provide invaluable knowledge and capabilities to work in the New York market.
“Consigli’s commitment to excellence and aligned values means that our people have found a great home at Consigli, and their expanding construction portfolio continues with exciting future opportunities,” said Claire Johnston, CEO of ‘America from Lendlease, which will remain with the company.
Mixed-use tower agreement
On the other side of the US, Lendlease reached a deal to keep its Hayes Point project alive. The 47-story mixed-use tower in San Francisco is the company’s largest investment in the US the company stopped the project in 2023due to aggravated financial constraints.
But last week, the The company signed an agreement with city officials to continue working on the troubled development, the San Francisco Chronicle reported. The deal will eliminate the city’s 25 percent affordable housing requirement.
The tower, which will feature 333 condos and 290,000 square feet of office and retail space, will no longer include the 83 affordable homes originally planned; instead, they will be built as market-rate units, the Chronicle reported.
When the company broke ground on the $1.15 billion project in 2022, with an eye toward a 2027 completion date, it was the largest new construction job in the city since the start of the COVID- 19. Work on the project was stopped and resumed several times, the Chronicle reports.
Johnston told the Chronicle that as part of the company’s development agreement with the city, Lendlease had to pay more than $40 million in impact and other fees, including $13 million for housing affordable, which are owed separately from the 83 units that Lendlease agreed to build.
In getting rid of the requirement, Johnston said the $40 million fee “essentially represents a huge overpayment,” the Chronicle reported.
“Instead of returning those funds through the city, we’re simply looking to have the $40 million, along with all the other fees we’ve already paid, count toward our total affordable housing supply,” Johnston told the Chronicle, saying: This gives us “a viable chance of success once the market normalizes”.
San Francisco’s planning department and board of supervisors will review the deal in the coming months.
