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Downtown mall sold for $125M; new owner says Wal-Mart won’t be a tenant in his skyscraper - Brooklyn Paper

Downtown mall sold for $125M; new owner says Wal-Mart won’t be a tenant in his skyscraper

The site of a Downtown Brooklyn mall that was reportedly eyed by Wal-Mart was sold this week — and the new owner says that the behemoth of Bentonville is not moving in.

Acadia Realty Trust and its development partner Paul Travis bought the aging Gallery at Fulton Mall from Thor Equities for a reported $125 million last week — and promptly told Wal-Mart opponents not to worry about seeing the chain’s yellow happy face on their property.

Rather, the partnership intends to demolish the home of Toys “R” Us, Forever 21, and a number of smaller retailers to make room for a 1.8-million-square-foot office, residential and retail tower called “The Center at Albee Square.”

Thor Equities paid just $25 million for the site in 2001.

“We received a letter from the developer this afternoon saying that he is not putting a Wal-Mart at the site,” Pat Purcell, an organizer of Wal-Mart Free NYC, told The Brooklyn Paper on Wednesday.

Purcell, who is also a spokesman for the union that represents city grocery workers, said he hoped the developer would also be willing to talk about including affordable housing in the tower, which will rise on the site, which is bordered by DeKalb Avenue, Willoughby Street and Flatbush Avenue Extension.

“He was very open-minded about what should be there,” Purcell said. “The fact that Wal-Mart isn’t coming is a victory for us and the developer has already said that he will have a meeting to discuss other issues.”

And issues there are!

A separate group of activists was planning to storm a public hearing on Thursday, when the city’s Industrial Development Agency was set to consider developer Travis’s request for $1.7 million in tax breaks.

“It is unreal that the city is considering giving this developer a tax break when you have people right here needing homes,” said Beverly Corbin, a Downtown Brooklyn resident and board member of Families United for Racial and Economic Equality.

The subsidy would be awarded in exchange for including three floors of offices in the building, according to documents submitted to the IDA by Travis and obtained by The Brooklyn Paper.

In the application for the subsidy, the developer estimated that the offices would accommodate 500 “tenant jobs” and generate nearly $13 million in direct and indirect city tax revenue.

The one-time exemption is routinely awarded to companies who build offices in areas that the city wants to maintain, or strengthen, business districts.

The city will get a cut of Thor Equities’ $125 million sale price because it owns the land beneath the mall. The land’s public ownership also means that Mayor Bloomberg must approve anything built on the site, even if it complies with the zoning.

Crain’s New York Business reported the Gallery’s sale on Tuesday.

The high-rise plans for Albee Square — a bridge between Fulton Mall and Fort Greene — are certainly no surprise, given that the city upzoned the area in 2004 to encourage just such development.

So far, the upzoning has failed to attract the office tenants and commercial developers the city had hoped — leading fiscal watchdogs to worry that tax breaks will be demanded every time a developer proposes building offices in Downtown Brooklyn.

These critics say that the city should not be handing out tax breaks to developers who are already taking advantage of the upzoning, which freed developers to build as high as 400 feet — and include profitable residential development in areas traditionally reserved only for offices.

“The city has created a situation where developers can build very profitable residential towers,” said Dan Steinberg, a spokesman for Good Jobs New York. “And so it must use incentives to get the offices and jobs that taxpayers were promised would come with the Downtown Brooklyn Plan.”

Janel Patterson, a spokeswoman for the city’s Economic Development Corporation, defended the incentive as a necessary aid for developers who are building costly office space for tenants that they do not yet know exist.

“The incentives being requested minimize the developer’s exposure to financial risk for developing commercial space prior to securing tenant lease,” said Patterson.

Patterson also highlighted the symbolic importance of the project.

“It will be the first major commercial project constructed in accordance with the city’s Downtown Brooklyn rezoning,” she said.

The Gallery was previously owned by Atlantic Yards developer Bruce Ratner, who sold it to Joe Sitt’s Thor Equities after it failed to attract enough high-dollar tenants.

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