On the Outs in Brooklyn
At the end of April, the shopkeepers and residents of a block-long trio of three- and four-story buildings on downtown Brooklyn's Willoughby Street got a jolt from landlord Albert Laboz. Without warning, eviction notices arrived en masse in mailboxes, giving tenants between 30 and 120 days to clear out or face court proceedings.
The merchants on the otherwise unremarkable block, between Bridge and Duffield streets, were stunned. "Out in 30 days is almost an impossible task for me," says Jeff Gargiulo, who opened his Bagel Guys store in 1997. "I have ovens and walk-in boxes and showcases and refrigeration units. It's going to take me 30 days just to disassemble it. And then to move it and store it, it could be up to $30,000 to do all that stuff."
The reason for the sudden evictions, Laboz's tenants soon found out, lay buried in a chart compiled by a public-private group known as the Downtown Brooklyn Partnership. Among the dozens of projects listed as pending for Brooklyn's downtown was one called "Willoughby West," a "mixed-use" building on the site of their stores. The only details given were its cost ($208 million) and size (594,000 square feet)enough on that site to rise 30 stories or more.
While Bruce Ratner's Atlantic Yards megaproject and the insta-towers popping up across Williamsburg have gotten more attention, an equally big land rush is stalking downtown Brooklyn in the wake of a rezoning approved by the city in 2004. Around the corner from Laboz's planned Willoughby West, the city is planning to raze a half-block of buildings to make way for a public plaza and underground parking garage for a Sheraton hotel already under construction across the street.
Among the doomed buildings are two 19th-century row houses that, local lore has it, were part of the Underground Railroad. "I was very disappointed that they would even think of taking these houses," says Joy Chatel, owner of 227 Duffield Street, where abolitionists Harriett and Thomas Truesdell lived and where the remnants of old tunnels are still visible in the basement. "They're going to level my house and then apply for a 'freedom trail' to take people past empty lots."
Another block east, Albee Square Mall merchants wait anxiously for word of their fate after its owner (and would-be Coney Island condo builder) Joe Sitt of Thor Equities sold the property to a consortium with rumored plans for a 60-story tower of condos, offices, and shops.
"The neighborhood is changing for the worse, not the best," says Yaakov "Jack" Fuzailov, who runs a basement barbershop adjoining the Lawrence Street subway entrance in one of the buildings that Laboz and his brothers want to raze. "They're taking the poor out, and they're not even putting in the middle classit's the rich."
Fuzailov, who had just entered the last year of a five-year lease when his eviction notice arrived, says that whenever he asked his landlord about the pending neighborhood redevelopment, he was told, " 'Jack, don't worry; it'll be 20 more years. I'm not even thinking about selling.' It was nothing but a lie."
Other tenants of the Laboz buildingswhich include a sushi joint, a check-cashing store, a tiny deli, and what must be the city's only remaining pizzeria serving $1.25 slicestell similar stories. "[Laboz] said, 'Don't worry, if I wanted you out, I would have had you out alreadyyou got plenty of time,' " says Gargiulo, who, like many others in the building, has been without a lease since 2004coincidentally or not, the same time as the city rezoning went through. (Albert Laboz and his brothers Jody and Jason, who collectively own United American Land LLC, did not answer repeated e-mail and phone inquiries for this story.)
The occupants of the Willoughby West site are now organizing with the help of Families United for Racial and Economic Equality (FUREE), a low-income-families group that moved into offices on Willoughby in late 2004 and promptly found itself in the middle of what it sees as a turf war over whom the neighborhood will serve. "Nothing is priced affordably for the people who live here," says FUREE board member Scherrille Murray. "This is not organic change. This is planned changebut planned for other people."
The roots of the battle go back at least to the 1980s. The city cleared out row houses and warehouses along Myrtle Avenue west of Flatbush, evicting about 250 residents and 750 workers, to make way for MetroTech, a planned hub to draw corporate back-office workers to Brooklyn. The city helped out not just by using its powers of eminent domain, but with about $300 million in subsidies to lure anchor tenants Chase Manhattan and Bear Stearns across the East River.
While MetroTech's corporate campus was a controversial addition to the skyline, it only whetted the appetite of Brooklyn business leaders and city planners to turn the area into a competitor with Jersey City for office tenants seeking relief from Manhattan rents.
The long-awaited catalyst finally came in January 2000, at a time when the Silicon Alley boom had soaked up every last scrap of available office space. Senator Chuck Schumer convened a working group of corporate execs, city officials, labor leaders, and more corporate execs18 of the 35 represented either large corporations or the real estate industryto examine future city development. A year and a half later, the "Group of 35" report was issued, calling for 60 million square feet of new commercial space by 2020equal to 15 World Trade Center towersto deal with what it perceived as an office-space crisis. "Without taking action to create more space," the report concluded, "New York City will miss out on hundreds of thousands of new jobs and increased economic activity in the next 20 years."
The following year, newly elected mayor Michael Bloomberg and his economic-development sidekick, Deputy Mayor Dan Doctoroff, arrived in City Hall and began working to make the Group of 35 vision a reality. The booming economy of the '90s that had sparked the Schumer report may have already become a distant memory, but Doctoroff, for one, was undaunted, saying: "We can't predict the futurewhen the economy's going to rebound. But we know that in the last boom, this city did not have the space for companies who wanted to stay here or relocate here."
The city ultimately approved a massive rezoning of an irregularly shaped stretch of downtown covering 22 blocks from Tillary Street south to Schermerhorn Street. Within that zone, the allowable height of buildings was effectively doubled. "If our views are obscured," said Downtown Brooklyn Partnership president Joe Chan last year from his MetroTech office, "we'll know we've done a good job."
At least at first, though, what Chan will see out his windows will not be Doctoroff's beloved office towers. The Brooklyn commercial market has stubbornly refused to rebound; MetroTech itself saw both JP Morgan Chase and Empire Blue Cross move out last year, leaving some 350,000 square feet of vacant floor space. Chan, looking on the bright side, told the Real Deal recently that this presented "a real opportunity to draw in new industries." Chan tells the Voice that the "renaissance" of the surrounding neighborhoods of Brooklyn Heights, Boerum Hill, and Fort Greene presents special possibilities, creating "a residential base that translates well to the employee base" of "creatively driven industries" like graphic design and architecture.
From underground railroad to underground parking: 227 Duffield Street
photo: Filip Kwiatkowski
In the meantime, developers have swiftly moved in to claim the newly liberated downtown frontier for the real estate flavor of the month: condos. Mid-rise apartment blocks were already in the works on Schermerhorn Street, along the northern edge of Boerum Hill; in the rezoned area, the preferred form looks to be the skyscraper, led by the much hyped Oro (top price: $995,000 for a two-bedroom) now rising at the base of the Manhattan Bridge on-ramp. (Condo conversions are also under way in both the old Board of Education headquarters at 110 Livingston Street and in the Verizon building opposite Laboz's planned Willoughby West.) The city's environmental-impact statement for the rezoning estimated that it would create 1,000 new units of housing; the Downtown Brooklyn Partnership now counts 7,500 new units already in the works, with Chan projecting as many as 14,000 eventually.
Turning Brooklyn's low-rise downtown into high-priced towers wasn't the original idea. "There was no constituency that had a vision of downtown Brooklyn as a high-rise bedroom community," notes Robert Perris, the district manager of Brooklyn's Community Board 2, which covers Brooklyn Heights, downtown, and Fort Greene. "Even people that were proeconomic development are disappointed that what we've gotten instead are 40-story residential buildings."
Even more disappointed, needless to say, are those who'd staked their futures on being a part of a newly energized downtown, only to find themselves staring down the barrel of a new Chelsea.
"We moved to this neighborhood when there were crack vials on the floor," Aviva Jakubowitz of Track Data Corporation testified last Tuesday at a city hearing on the fate of the block that contains her company's offices, as well as the Duffield Street Underground Railroad houses. "Now, finally, the neighborhood has changed, and the city wants to take our property by eminent domain."
Also galling is the incestuous nature of the planning process, which has from the start been guided by people with one foot in the development community and the other in City Hall. The Downtown Brooklyn Council, the advocacy group of major area institutions that helped spearhead the rezoning push, was launched in 2000 with James Whelan as its director. Whelan left in 2003 and is now Doctoroff's senior economic-development advisor; his replacement, Michael Burke, was formerly chief of staff for Brooklyn Borough President Marty Markowitz.
Last year, the DBC was folded into a new organization, the Downtown Brooklyn Partnership. Its first president was Chan, Whelan's predecessor as Doctoroff's development aide. Formed from the merger of the DBC, the MetroTech Business Improvement District, the Fulton Mall Improvement Association (whose co-chairs are Al Laboz and Joe Sitt, and whose treasurer is Michael Burke), and the BAM Local Development Corporation, the Partnership has been described as a "BID on steroids": Technically a private nonprofit, it has worked so closely with the city Economic Development Corporation on rezoning that several press accounts have mistakenly called it a city agency.
All this has left some small-business owners who are members of the BID wondering whether anyone is left to look out for their interests. "The MetroTech BID, we didn't hear from them," says bagel guy Gargiulo. "I was even up at the Brooklyn Chamber of Commerce talking with Mr. Burke, and I had asked him, 'Did Mr. Laboz tell you anything about our building?' This was maybe six months ago. And he hadn't heard anything."
The question of whom a redeveloped downtown will serve is touchy, with all involved doing a careful dance to avoid the worrisome topic of who will be pushed out when the New Brooklyn arrives. Chan stresses the new retail space set to be built, which, he hopes, will provide enough excess supply to keep storefront rents low. (Retail rents in the Fulton Mall are already among the highest in Brooklyn.)
Laboz has used his spot as co-chair of the Fulton Mall Improvement Associa tion to push a vision of the mall as a "new 34th Street"which fits well with the Macy's that currently occupies the historic A&S flagship building there, but perhaps not so much the rest of the busy strip, seemingly equally divided between jewelry stores with sneaker displays and sneaker stores advertising "We Buy Gold." "This is not a race issue," Laboz assured the Observer last year. "The car is running on five cylinders. The goal is to make it a better experience and a better environment for everybody." Chan calls it "surprising" that downtown Brooklyn lacks its own H&M, and points to the Atlantic Terminal's Target outlet as a model for a "diversified" retail experience where you find "families from Park Slope shopping next to families from East New York."
The Department of City Planning's webpage on the downtown Brooklyn redevelopment plan declares that its goal is to "serve the residents, businesses, academic institutions, and cultural institutions of Downtown Brooklyn and its surrounding communities." The city's actual environmental-impact statement for the rezoning plan, though, was more blunt, saying that while current businesses would be displaced, they would not be "significant" losses because "they do not have substantial economic value to the City, they do not define neighborhood character, nor do they belong to a special category of business that is protected by special regulations or publicly adopted plans."
The area's council representatives choose their words more carefully. Letitia James, whose Fort Greene district abuts the eastern edge of the rezoned area, lauds the two planned developments on Myrtle Avenue in her district that will include affordable-housing components. As for displacement of the existing community, she calls the situation "a very delicate balance" and says she plans to "continue to monitor the situation."
Most of downtown falls into the district of David Yassky, the chair of the council's small business committee, who has backed the rezoning. He echoes Doctoroff's belief that commercial demand will ultimately rebound, and "when the demand comes back for office space here, the zoning means that people will be ready to respond." Seven years ago, he notes, Goldman Sachs chose to build a new office tower in Jersey City instead of Brooklyn. "I think we do want to make sure that doesn't happen again," Yassky says.
What about the widespread feeling among downtown merchants that the rezoning was designed to push them out in favor of a new clientele with deeper pockets and lighter pigmentation?
"Sure, I've heard some business owners saying things like that," says Yassky. He calls Albee Square Mall an anomalysome merchants pay as little as a third of the going ratebecause "the guy who owned it wanted people who he could kick out at a moment's notice." And as for the rest, well, that's just capitalism. "To me, it's not accurate to say that this is because of the rezoning," says Yassky. "These are market forces here that are making what were formerly low-rent areas, both residential and retail, into high-rent areas. I'm not saying it's a good thing. But it's market reality."
It's a market, though, that was largely createdor at least abettedby the city's own rezoning. "We had a significant jump in developable floor-area ratio in some of these areas, so some of these buildings would not have gone up without that incentive," says CB2's Perris. "When you increase the size of the building by 50 percent, it changes all the numbers."
The city's ability to create tremendous wealth for landowners simply by tweaking a few floor-area ratio numbers is one reason many urban-planning advocates have pushed for something called "inclusionary zoning," in which developers must agree to provide a certain percentage of affordable housing in order to exceed the existing height limits.
Though inclusionary zoning was used on a limited scale in the recent rezoning of Williamsburg and Greenpoint, it was rejected by the city for the upzoning of Park Slope's Fourth Avenue and never even got on the table for downtown Brooklyn. Chan insists that even if the city had known of the coming residential boom, inclusionary zoning was not needed. As with Fulton Mall rents, he keeps faith in the restorative powers of supply and demand, saying that by allowing taller residential buildings with more units, "hopefully, with that amount of supply, prices will kind of balance out."
"I couldn't find some array of forces willing and interested to work on it, honestly," says Brad Lander of the Pratt Center for Community Development, who has been the strategy's most tenacious champion. "I met Jim Whelan when he was head of the Downtown Brooklyn Council, and I tried to pitch him. I said, 'Here's this great idea; it'll work for you, it'll work for everyone.' And he chuckledhe kind of said this seems like a reasonable idea, but the way things are going in this administration . . . "
It's a scenario that, planning experts say, points out one of the main flaws with the city's rezoning process: With public discussion limited to the advisory vote of the local community board, it takes an extraordinarily committed organization of local residents to get the city to veer from its declared path. And even then, the appointed community boards are no guarantee to represent the communityas residents of Brooklyn's Board 6 found out last week when nine members were purged by their political patrons for voting against Atlantic Yards, and the Bronx's CB4 saw last year in a similar purge over the new Yankee Stadium plan.
The main reason Williamsburg got a side dish of affordable housing with its condo towers and downtown didn't, says Lander, is that "in downtown Brooklyn, nobody stepped up to organize. It was the whole normal process in terms of what the city did. Folks on the ground did not step up and try to affect it."
Now, with the 60-story horses out of the barn, the opponents' options are limited. FUREE says it wants to cap the height of new buildings, save the Underground Railroad site at 227 Duffield, and increase the affordable-housing component. "Let's make sure we're looking at at least 50 percent affordable housing, because you need to build for the people who are already in the area," says FUREE board member Murray. FUREE and Lander both feel that the city is missing an opportunity by approving the transfer of the Albee Square Mall lease to the new development consortium, letting go one of its few remaining pieces of leverage on a downtown parcel, without demanding any kind of affordable-housing commitments in return.
Gargiulo, who admits that he paid little attention to the rezoning plan when it was in the works, now keeps a petition in his store for patrons to call on the city to "reject the destruction planned by the Willoughby West Development Project." He recalls the mayor's recent statement on the proposed redevelopment of Willets Point in Queens: "There will always be one person who objects to everything, but I don't think anybody suggests that this society should stay back in the Stone Age and never move ahead."
"I got a thousand signatures in three days," says Gargiulo. "It's not just one person that wants to stop this. It's thousands."
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