For years, Joseph McDonnell and his associate at Cirrus Actual Property watched the drama at Pacific Park unfold from afar.
They weren’t alone. Anybody working in New York Metropolis actual property is aware of the define of the challenge’s two decades of problems: how a improvement as soon as described as a “Backyard of Eden” received slowed down by opposition, monetary issues and politics. By late 2022, the developer was in default on $350 million in loans tied to the megadevelopment, and a 12 months later the lender moved to foreclose on the location.
It was arduous to think about who’d need to bounce in and end the job. Anybody changing the developer, Greenland USA, a subsidiary of Shanghai-based Greenland Holdings, must lay out a brand new imaginative and prescient, get state approval, negotiate hefty fines and set new deadlines.
However Cirrus’ executives saw a salvage operation, they usually purchased the debt.
“We thought it was a no brainer,” McDonnell stated throughout a current interview in Cirrus’ Midtown workplace.
Cirrus, which McDonnell runs with Anthony Tufariello, appeared a much less apparent option to others.
As an organization, Cirrus hasn’t constructed something from the bottom up and lacks the title recognition of Associated Corporations, one other agency that toyed with taking on Pacific Park. Nonetheless, the pair has overseen $150 billion in actual property finance transactions, $10 billion in actual property fairness investments and greater than 10,000 multifamily models.
Now, by counting on deep business connections and expertise from an extended checklist of tasks, McDonnell and Tufariello have positioned their agency as a backer of main tasks that would ship New York Metropolis 1000’s of reasonably priced housing models after a long time of delay, not only a quiet supplier of rescue capital.
At Pacific Park, Cirrus introduced on an skilled multifamily developer, LCOR, which oversees a portfolio of 10,000 residential models throughout the U.S. Then, town tapped the 2 corporations to construct 3,000 housing models at a defunct airport in Flushing, Queens.
One other substantial challenge materialized in Could 2025, when Cirrus fashioned a three way partnership with Resorts World New York Metropolis to construct as much as 50,000 housing models throughout the 5 boroughs, a promise that sweetened the latter’s bid to increase its slot parlor in Queens right into a full-blown on line casino. In December, Resorts World clinched one among three licenses awarded by the state.
However Cirrus’ visibility wasn’t fairly as sudden because it appeared. The principals had step by step constructed a public profile. In March 2024, the corporate reached an settlement with Mayor Eric Adams and the Constructing and Development Trades Council, signing a memorandum of understanding to lift cash from the development union pension funds to finance workforce housing all through town.
Initially, $100 million was raised, however the fund is predicted to cap out at $400 million, in response to McDonnell.
The thought, which isn’t unheard-of, is to put money into union-built, ground-up housing tasks which are reasonably priced to moderate-income residents. In different phrases, the employees whose pension funds are financing the development can in the end reside within the buildings. All of Cirrus’ proposed housing tasks could be constructed this fashion.
However they’re making their plans in a state with a raging debate about mandating union labor in housing manufacturing, particularly reasonably priced housing. Cirrus and the unions want to show that financing such tasks with union pension funds is the answer, and one that may be scaled as much as deal with the affordability disaster.
Although Cirrus’ proposed unit rely is within the tens of 1000’s, success in these tasks nonetheless doesn’t assure that different builders, on other forms of tasks, would flock to the mannequin.
“That is proof of idea,” Gary LaBarbera, head of town and state chapters of the Constructing and Development Trades Council, stated.
In fact, it’s solely proof if it’s constructed.
Origin story
Earlier than becoming a member of forces, McDonnell and Tufariello have been rivals.
After the 2008 monetary disaster, the 2 competed for restructuring and rescue-capital offers — McDonnell at BlueMountain Capital and Tufariello at Fortress Funding Group.
The pair determined to depart their bigger corporations at about the identical time, in 2017, and discovered from business scuttlebutt about one another’s departure. They started working collectively informally and ultimately registered as an funding advisor in January 2020. The timing was not best.
“I don’t assume I’d begin a enterprise simply earlier than Covid once more,” McDonnell stated.
With out having the ability to journey and community, the pair leaned on investor relationships they’d constructed over the course of their careers, whilst different corporations struggled to lift capital.
Tufariello, who has a house in Boca Raton, toured properties in Florida.
“How briskly can this method be ramped as much as meet the demand?”
Early offers included offering a $90 million stock mortgage to the builders of the Zaha Hadid-designed One Thousand Museum apartment tower in Miami. The crew, led by Louis Birdman, Kevin Venger, Gregg Covin, Gilberto Bomeny and Todd Michael Glaser, have been heading off foreclosures. An entity tied to Reuben Brothers had purchased out Fortress’ stake within the property in February 2021 and shortly after filed a lawsuit to foreclose on the remaining 15 unsold apartment models. The builders paid off the stock mortgage that December.
Cirrus labored with the builders on two extra offers, offering financing for improvement websites in Edgewater in Florida.
“At any time when we’re taking down land, initially, they at all times have first look as a result of they’re simply straightforward to cope with, very cheap guys, who know the market nicely,” Kevin Venger, co-founder of One Thousand Group, stated.
Originally, McDonnell and Tufariello grew their credit score enterprise in New York, Miami, Los Angeles and San Francisco, with some work in Chicago and Washington, D.C. They not too long ago created a joint venue to concern development loans, although McDonnell wouldn’t title the agency’s associate on that.
Since branching out to turn into builders, they’ve targeted on New York, with plans to put money into Philadelphia, Boston and New Jersey. They are saying they’ll announce a solo ground-up challenge within the coming months. Every part else is with companions.
For now, the agency works out of a brief house on the sixth flooring of Savanna’s 106 West 56th Avenue; it purchased a word secured by the workplace constructing in November 2023. On a January morning, staff stuffed cubicles in six-desk rows, although the house had the sensation of not being absolutely arrange, with laptop screens propped up in opposition to empty vibrant white partitions.
The principals named the corporate after cirrus clouds, the wisps that kind at very excessive altitudes. McDonnell evoked the lofty feeling, leaning on the phrase “elevate” when discussing the agency’s interactions with buyers, companions and residents.
He additionally takes the title actually.
“If you have a look at the place Cirrus invests typically, it tends to be actually solely the highest 4 or 5 markets within the U.S., the place buildings are typically taller,” McDonnell stated.
The union join
The deal to construct with union labor and pension funds got here along with the assistance of Kevin Gallagher, who’d recognized LaBarbera for 20 years and launched him to McDonnell and Tufariello.
Gallagher, a veteran of each the union and workforce housing scenes, then joined Cirrus in 2024 as head of origination and structuring for Cirrus’ workforce housing fund.
In 2006, as director of housing for the New York Metropolis Central Labor Council of the AFL-CIO, he helped lead the union’s cost to lift $4 billion to bid on Stuyvesant City and Peter Cooper Village, an effort that failed when Tishman Speyer agreed to pay $5.4 billion for the advanced.
He later made an identical play for Starrett Metropolis with former associates, with whom he’s locked in a bitter authorized struggle.
In 2015, he sued John Crotty, John Warren and John Fitzgerald, accusing them of closing him out of a profitable partnership between their firm, Workforce Housing Advisors, and JPMorgan. The trio, which now runs a separate firm known as Workforce Housing Group, argue that they labored with Gallagher by restricted partnerships tied to particular person tasks, not as a proper firm. Based on their responses to the lawsuit, the settlement didn’t forestall them from pursuing alternatives with out Gallagher, whom their legal professional describes in court docket filings as “grasping.”
“Kevin has demonstrated a complete disregard for reasonably priced housing in his actions with us,” Crotty stated in an interview. “Him presenting himself as an affordable-housing individual to the folks of Brooklyn is laugh-out-loud humorous.”
A spokesperson for Cirrus declined to touch upon the litigation however stated Kevin was happy with his work on Stuyvesant City and Starrett Metropolis, which he believed introduced extra consideration to reasonably priced housing: “He’s overjoyed that immediately’s political panorama has lastly caught up with these priorities.”
Litigation apart, Gallagher’s mannequin at Cirrus has some components of his earlier workforce housing ventures. Then, he focused overleveraged multifamily buildings, purchased up the notes on underperforming loans and, in instances the place the proprietor couldn’t pay up, foreclosed and submitted a credit score bid to take management of the property. Companions would then safe everlasting financing, with the objective of “shifting properties out of the cycle of dangerous funding into accountable, long-term possession,” in response to an investor deck for one of many earlier firm’s funds, which was filed with court docket paperwork.
Although Cirrus nonetheless buys overleveraged loans and takes over properties, McDonnell stated he doesn’t think about Cirrus to be within the enterprise of “distressed debt,” and that the corporate prefers to work out options for debtors. This has resulted in repeat clients.
“We’re introduced into these conditions, often when it’s very robust actual property, however it’s a posh scenario,” he stated.
Workforce housing for NYC
New York Metropolis has many housing initiatives however few for the “lacking center,” Cirrus’ viewers.
Cirrus’ plan to finance and construct these models made sense to LaBarbera, who met with the Cirrus executives.
About the identical time, LaBarbera was speaking with Mayor Adams, he recalled. “We received to a degree the place [Adams] liked the idea. I stated to him, ‘Look, give us a 12 months.’”
They received particular person union pension funds on board and raised the preliminary $100 million. The mayor traveled to the buildings trades’ convention in Florida to signal the MOU. Since then, they’ve pooled pension funds from greater than a dozen development unions.
The fund will take fairness positions in Pacific Park, in addition to at the Flushing airport site. Some have questioned whether or not the cope with town gave Cirrus an edge within the competitors for the latter website. Cirrus and LCOR have been one among seven groups that bid on the challenge, in response to a response offered to The Actual Deal following a freedom of knowledge request. Cirrus’ proposal known as for extra housing models than many of the different proposals. One crew pitched developing a cement different manufacturing facility on the location.
Nonetheless, Andrew Esposito of Apex Growth, one of many bidders, stated that “given the challenges offered on the website, … we question how the chosen group with a obviously absent observe report of finishing improvement tasks will deal with these actual points, whereas additionally incorporating guarantees of intensive union involvement.”
Unions have struggled to extend their market share of reasonably priced housing tasks in New York Metropolis, and makes an attempt to legislate such development have been met with resistance from builders. For instance, the property break 485x units a development wage flooring for all tasks with 100 or extra models, and even increased for tasks above 150. Builders have averted these mandates by capping models at 99.
It stays to be seen what stage of public subsidy these tasks would require, even with the union pension fund investments. Cirrus is in search of the property tax break 485x on the airport website, and McDonnell has stated that the ultimate housing plan for Pacific Park will depend on what metropolis and state subsidies can be found.
LaBarbera, nonetheless, believes that town signing on to the mannequin signifies that tasks will pencil out.
“There was at all times this place of the true property business that this couldn’t be accomplished, which you could’t construct residential, reasonably priced, workforce housing beneath a union mannequin,” he stated. “We’ve got simply disproved that.”
Behind the scenes at Pacific Park
Greenland USA’s lender on the Pacific Park websites was Nick Mastroianni’s U.S. Immigration Fund, which had raised capital by the cash-for-visas EB-5 program.
Cirrus then took over $200 million in Greenland’s excellent debt throughout the U.S., and was able to additionally tackle the greater than $350 million hooked up to 6 websites at Pacific Park, which USIF had offered; Fortress additionally owned a stake within the debt.
“That was a really tough and difficult deal to do,” Mastroianni stated. “I’d been negotiating with Greenland for 5 years, I couldn’t get them to maneuver.”
In early 2025, Mastroianni and McDonnell received lunch at Cipriani’s on Fifth Avenue.
They disagree on who requested whom however align with regards to the assembly: what to do about Pacific Park.
“I stated, pay attention you’re keen, let’s put it together,” Mastroianni recalled.
The 2 had beforehand labored collectively at The Bryant, HFZ Capital Group’s luxurious apartment resort on West fortieth Avenue, which Cirrus recapitalized, offering a mortgage to USIF, after HFZ collapsed.
Cirrus’ principals had earlier run-ins with the defunct actual property agency. By way of the Versant Group, Tufariello invested in business lender Allegiant Capital in 2017, alongside HFZ executives Ziel Feldman and Nir Meir. An October submitting with the Securities and Alternate Fee lists Tufariello as a chair of the corporate, in addition to an oblique proprietor alongside Feldman and Meir. Each Feldman and Meir have beforehand claimed to personal important stakes in Versant, in response to court docket filings.
Representatives for Cirrus stated the submitting was an error and that Tufariello hasn’t been concerned with Allegiant since 2019. They indicated that Tufariello didn’t have a relationship with HFZ.
Mastroianni credit Cirrus’ buy of most of Greenland’s debt for shifting the megadevelopment ahead. Associated Corporations was in talks for the challenge in 2024, however in the end determined in opposition to sticking round.
Cirrus’ capacity to soak up the rail yard websites, in addition to a separate property throughout from the Barclays Middle, possible performed in its favor. On the very least, the truth that the corporate may incorporate the location into its broader plans strengthened its pitch to state officers, who wanted to approve the event crew changing Greenland.
Cirrus and LCOR formally took over the prepare websites in October, by a foreclosures public sale and with the blessing of Empire State Growth and the Metropolitan Transportation Authority.
Anthony Tortora, co-chief funding officer at LCOR, stated he was launched to the Cirrus leaders by a mutual good friend at Plaza Development. The ability units of the 2 corporations complemented one another, he stated. Cirrus introduced intensive capital markets expertise and a great relationship with the unions to the desk, whereas LCOR had a historical past in multifamily improvement, in addition to its work at one other rail yard in Hoboken, New Jersey.
The businesses additionally shared a dedication to constructing workforce housing.
“There’s loads of alignment by way of how we take into consideration the world,” he stated.
“There was at all times this place of the true property business that this couldn’t be accomplished, which you could’t construct residential, reasonably priced, workforce housing beneath a union mannequin. We’ve got simply disproved that.”
Pacific Park, initially known as Atlantic Yards, was first introduced in 2003, and has since been held up by varied forces, together with litigation, development defects, the departure of builders and within the case of Greenland, the monetary woes of its guardian firm in China.
Over the previous twenty years, 9 buildings (together with the Barclays Middle) have been accomplished, with greater than 3,200 flats constructed by Forest Metropolis Ratner, Greenland USA and different builders who, through the years, have taken over particular person websites.
Cirrus and LCOR have pitched what they’ve known as “contours of a plan” for the remaining websites. This imaginative and prescient would end in taller towers than beforehand deliberate and would in the end internet 9,000 models as an alternative of 6,430.
McDonnell is essentially the most public-facing of the Cirrus executives. Mushy-spoken and measured at public conferences, he has described the imaginative and prescient he and his companions have devised as far as what’s “possible” however not closing.
“We’ve tried to deliver a really lifelike and clear method to this,” he stated.
He additionally has emphasised the “mission-driven” nature of the workforce housing fund, and that Cirrus’ plan is guided by wanting to construct as a lot housing as shortly as attainable, and to make it reasonably priced to a variety of incomes. For that purpose, Cirrus and LCOR are contemplating not constructing on one of many six rail yard websites and as an alternative shifting density there to the opposite deliberate towers.
The reasonably priced models would goal reasonable to middle-income residents, capping hire at ranges reasonably priced to these incomes 130 % of the realm median earnings.
That threshold has already drawn criticism from advocates who’ve lengthy adopted the challenge, arguing that extra models must be accessible to very low-income earners.
Future trying
Quite a few the corporate’s tasks are in transition. In December, Cirrus received a chapter public sale for a Miami redevelopment website with a $77 million credit score bid. The corporate had moved to foreclose after the developer Gilberto Bomeny defaulted on a $70 million mortgage tied to the property. A decide, nonetheless, ordered a brand new public sale, by which Cirrus in the end received with a $95 million bid. Cirrus’ plans for the location are unclear.
A decide, nonetheless, ordered a brand new public sale, discovering that “fixed modifications and irregularities” prevented different bidders from competing. Cirrus’ plans for the location, ought to they in the end maintain onto it, are unclear.
In New York, the board charged with reviewing purposes for state on line casino licenses urged gaming officers to carefully observe all commitments made by the three successful groups — together with the housing pledge made by Resorts World, which it described as obscure. McDonnell stated no websites have been chosen but as a part of its partnership with Resorts World.
At Pacific Park, Cirrus and LCOR should ink a memorandum of understanding outlining the challenge by July 31, 2026. In any other case, the state may renew fines in opposition to the agency that have been speculated to kick in in June 2025, a earlier deadline for finishing the challenge’s reasonably priced housing models that Greenland failed to fulfill.
It’s been almost two years because the settlement was reached with town and the development unions, and Cirrus additionally should work with a brand new administration. Mayor Zohran Mamdani has stated that he needs to construct 200,000 reasonably priced housing models within the subsequent decade, solely with union labor. He hasn’t specified how he’s going to try this nor if he’s planning to lean on the mannequin employed by Cirrus. (Former Gov. Andrew Cuomo, in contrast, cited Cirrus by title in his housing plan.)
McDonnell sees a possible champion in Leila Bozorg, deputy mayor of housing and planning, who previously served within the Adams administration and was concerned within the settlement with the union pension funds.
In an interview, she stated she is dedicated to work with the constructing trades to develop extra workforce housing fashions and is working with town and state comptrollers to discover different pension fund investments into housing.
Lou Coletti, a senior advisor with authorities relations agency Davidoff, Hutcher & Citron and former president of the Constructing Trades Employers’ Affiliation, which represents normal contractors, stated the mannequin may very well be tough to duplicate on a grand scale, on condition that the person board of trustees for every pension fund has to log off on investing.
“It’s fairly a prolonged course of,” he stated. “How briskly can this method be ramped as much as meet the demand?”
