Last month’s abrupt shutdown of a major development project near Metrotech is a setback for planners’ lofty vision of a new, 24-7 business and residential mini-city in Downtown Brooklyn, said experts this week.
John Catsimatidis, the owner of the Gristedes supermarket chain, who tore down a Laundromat, pharmacy and grocery store along two Myrtle Avenue blocks in preparation for a 660-unit, mixed-income residential development, has halted the project — temporarily, he says — blaming both the credit crisis and the lack of affordable housing bonds.
“Right now we’re in an evaluation stage, which should last a few weeks,” Catsimatidis told The Brooklyn Paper.
On the one hand, Catsimatidis could abandon the project’s 215-unit affordable housing component altogether and just build market-rate units, but then he’d also be passing up some tax incentives.
“It’s not required by law, but we get certain bonus opportunities if we do [the affordable housing],” he said.
Then again, if he just builds market-rate units, the private credit crunch and looming recession cast doubt on whether he’ll get enough financing, and whether enough buyers will be able to afford the finished product.
Such questions are increasingly bedeviling developers in Downtown Brooklyn, according to Joe Chan, the president of the Downtown Brooklyn Partnership, the quasi-governmental group that oversees the redevelopment of the area bounded by Tillary, Fulton and Jay Streets and Flatbush Avenue Extension.
“Do developers developing condos [consider] a rental scenario?” asked Chan. “Do they [consider] a condo project with a hotel component? Absolutely. I think you see a more thorough analysis of their options.”
Chan said such rejiggering is coming in the wake of the sub-prime mortgage meltdown.
“We are definitely seeing developers having more difficulty getting financing now than they did three months ago,” said Chan.
Ray Quartararo, of Jones Lang LaSalle, an international firm that manages projects for developers, said that it’s not just banks that are growing more cautious. Some builders are getting cold feet, too.
“People who were going to move forward very quickly on a deal, are beginning to say, ‘You know what, I’m gong to wait and see what happens,’” said Quartararo, though he stressed that the full impact wouldn’t be felt for a couple of years yet.
Chan’s forecast is less optimistic than the vision of a glitzy, 24-7 residential and business community that he presented in November, in an animated presentation narrated by legendary actor Ian McKellan.
The presentation predicted $9.5 billion in new private investment by 2012, including 14,301 residential units, 1,803 hotel rooms and 1.6 million square feet of new retail space.
That vision was itself a reconfiguration of the original Downtown Brooklyn Plan, which envisioned Downtown as a booming business district, rather than a bedroom community.
Whatever he decides to do, Catsimatidis, who revealed the delay to New York Magazine, sought to downplay any concerns that he’s going to leave a block of abandoned lots between Prince Street and Ashland Place in Fort Greene, where once there were neighborhood amenities.
“We’re being a little extra cautious,” he said. “You wouldn’t want to jump in a swimming pool unless there’s water in there.”