Forgotten stretch of downtown Brooklyn is hot property

Real Estate Weekly, June 20, 2001 by James Whelan

A previously underutilized stretch of Downtown Brooklyn real estate between the historic brownstone neighborhood of Boerum Hill, the thriving retail corridors on Atlantic Avenue and Court Street, and the commercial core around MetroTech, became hot property in the first half of 2001. Despite concerns of a softening real estate economy, the area's prospects remain strong for the rest of the year and into the foreseeable future.

Recently, new retailers like Regal Cinemas, CVS, Barnes & Noble and Ben & Jerry's have all opened stores along Court Street. New residential construction is moving right up to Atlantic Avenue where a number of upscale restaurants, boutiques and other stores have joined established antique stores and Middle Eastern restaurants. Vacancy rates have dropped dramatically.

In late May, the Empire State Development Corporation (ESDC) announced the winning bidder on an REP for one of three state-owned surface-level parking lots (an 18,000 SF property on the corner of Atlantic Avenue and Smith Street). The winning developer, Shaya Boymelgreen, is paying $3.3 million for the property. He plans to construct about 30 condominiums, retail shops, underground parking and almost 30,000 SF of space for the YMCA.

The ESDC plans to put its remaining two lots, with a collective footprint of 156,000 SF, along Schermerhorn Street between Smith and Bond Streets, up for bid this summer. Given that eight prominent developers submitted strong bids during the first REP, there is a great deal of optimism among brokers and business advocates that the second REP will generate strong interest.

A major impetus behind the ESDC sales -- which had been on the drawing board for decades -- was the Hoyt Schermerhorn Task Force, convened last year by Brooklyn Borough President Howard Golden. The task force, which comprised local community groups and elected officials, worked side by side with ESDC in the creation of the first REP.

They helped designed a set of guidelines which called for bids utilizing a dynamic mix of residential, commrcial and retail components as well as a limited number of community amenities. With the area bordering both the adjacent central business district and the beautiful Boerum Hill brownstone neighborhood, where property values have risen precipitously over the past few years, the idea was to develop uses that will serve as a bridge to these prosperous yet distinctive neighborhoods.

The City recently got into the act as well. This autumn, the New York City Economic Development Corporation (EDC) will announce a winning bidder on an REP for the sale and development of a site occupied by a municipal parking garage at the intersection of Atlantic Avenue and Court Street. The garage site has a footprint of 47,000 SF and under the proposed Special Downtown Brooklyn Zoning District would be zoned C6-2A (allowing for an FAR of 6 for residential and commercial uses and a height limitation of 120 feet). EDC is encouraging developers to submit plans that activate the ground level on both Atlantic Avenue and Court Street by incorporating ground floor retail.

The sale of publicly-owned properties already is having a ripple effect on privately-owned properties. For example, Brooklyn Law School recently announced the purchase of a parking lot and garage on Boerum Place and State Street, which they will, use to build the school's first-ever dormitory. Across the street from the ESDC's Atlantic Avenue site, Axelle Fine Arts has opened a gallery in a building it recently acquired.

These positive developments, combined with the area's strong transportation links and other amenities, promise a future in which this mixed-use zone bustles with business people, employees, students, residents from all walks of life and retailers serving those who frequent the area. Even better than the promise is the fact that government has accomplished these plans working hand-in-hand with the business and residential communities.