Extell Sells Papaya King Development Site to ZD Jasper

Extell Development may have bitten off more than it felt like chewing on the Upper East Side.

Gary Barnett’s firm sold its development site at 1530 Third Avenue to Long Island-based ZD Jasper Realty for $24.5 million, Crain’s reported. The 5,000-square-foot, single-story building was home to longtime hot dog stand Papaya King, which has closed and is relocating across the street following a dispute.

The sale came to about $29 million including air rights, according to Randy Modell of ABS Partners, which advised Extell on the sale with Steven Hornstock and Alan Cohen. The property includes 150 feet of retail frontage on 86th Street, Modell told The Real Deal. The deal pencils to nearly $490 per square foot.

The site now has 60,000 square feet of development potential, including the 10,000 square feet of inclusionary air rights, which came from a Second Avenue property that Extell owns.

Barnett’s ownership of the former food stand was brief; Extell purchased the site for $21 million two years ago. The firm filed plans last year to demolish the property, which also once housed a Children’s Place store and a Cohen’s eyeglasses shop. The property along 86th Street is still standing.

ZD Jasper took a $14.5 million loan from Pacific National Bank to finance the deal for the property on the site, which is zoned for a building up to 20 stories high.

The firm did not comment to Crain’s, while a spokesperson for Extell did not respond to the outlet’s request for comment.

Papaya King and its former landlord, Imperial Sterling, settled their dispute over the hot dog stand in April. They had been bickering since 2020 when Imperial accused Papaya King’s management company of breaking in and reopening the shop illegally after unpaid rent led to a termination of its lease.

ZD Jasper and Extell have done business before. Last year, Barnett’s firm sold a three-parcel site to Tom Zhidong Wu’s company for $51.7 million. The three Far West Side properties combined for more than 28,000 square feet of built space and 90,000 square feet of additional rights.

The former Papaya King development site is a stone’s throw from a prominent Extell residential project, where Barnett has been going toe-to-toe with holdouts.

This story has been updated with information about air rights in the deal.

— Holden Walter-Warner and Orion Jones