Sheepshead Bay Blues: Sandy Still Leaves Behind Sour Notes
By Lore Croghan
Brooklyn Daily Eagle
It's game on at One Brooklyn Bridge Park.
The developer of the luxury condo conversion at the south end of the ever-more glamorous waterfront park has hired a new leasing agent for a fresh campaign to find tenants for 68,000 square feet of vacant retail space in the nearly empty base of the building.
CPEX Real Estate Services has the exclusive assignment to market the space at 360 Furman St., the 14-story former Jehovah's Witnesses book plant at the foot of Joralemon Street that developer Robert A. Levine bought for $205 million in 2004 and turned into 438 condos.
“It is a big deal in terms of its scale – and it has awesome visibility and onsite parking,” said Timothy King, CPEX managing partner. “For shoppers, that is huge.”
The building has a 500-car parking facility with an additional 132 parking spaces reserved for building residents.
“It's a unique location – and now the park is much further along in its development. That will make it more appealing to tenants than it was a year or two ago,” King said.
There's foot traffic – meaning potential customers – from the park that wasn't there before.
Still, he cautioned, “it's been vacant a while, and it's going to take time to find the right tenants.”
The park is going to be “book-ended,” he said – with One Brooklyn Bridge Park to the south and the massive Empire Stores restoration and redevelopment project on the north.
Park construction is full speed ahead. Earlier this week, BBP issued a request for proposals for the long-term lease, development and operation of a marina adjacent to Pier 5, which is right behind One Brooklyn Bridge Park.
As with all the residential developments being allowed inside BBP, annual contributions from One Brooklyn Bridge Park help pay for park maintenance.
The search for tenants for The Shops at One Brooklyn Bridge Park began in early 2007 – but was put on hold when the economic downturn hit in 2008, published reports indicate.
Though a new leasing push began in late 2009, the first two tenants didn't sign on until 2011: Waterfront Wines and Spirits and a pet spa, Brooklyn Bridge Bark, which is now called WAG Club. At this point, they are the only retailers in the mammoth 1 million-square-foot building, which has 14-inch-thick concrete walls.
Some interior demolition is going on this week inside the empty retail space. One of the storefront windows still has a for-rent sign with the name of previous leasing agent Winick Realty Group on it.
For the brokers from CPEX who are now handling the job, the plan is to make food businesses prominent players at One Brooklyn Bridge Park. They will aim for “multiple themed restaurants” and a supermarket – but not Fairway because its Red Hook store is too close by or Whole Foods because of the store it's building in Gowanus, King said.
They'll also go after coffee shops, juice bars, schools, gyms and day-care centers.
The leasing team of CPEX managing director Ryan Condren and associates Kristina Triglia and George Danut divvied up the ground-floor space into several smaller storefronts of about 3,000 to 5,000 square feet apiece and a large site of more than 30,000 square feet. A second-floor space of 15,000 square feet can be combined with 1,575 square feet on the ground level. There is also a 3,600-square-foot lower level space.
Asking rents are $35 to $50 per square foot on ground and second floors.
A number of retail leasing firms competed for the assignment from The Spandrel Group LLC, the property manager affiliated with One Brooklyn Bridge Park's developer.
FRANCHISEES BET … ON BETTING PARLOR SITE
The Off Track Betting parlor at 88 Livingston St. that shut down in 2010 is back in the money.
Franchisees of a New Jersey coffee shop are betting that the Downtown Brooklyn site between Court Street and Boerum Place will be a spot where Mara's Cafe can flourish.
Dr. Ayman Farag, the member of the franchise group who did the space search, wanted to find a location near Court Street, said Robert Hebron V of Ingram & Hebron Realty, who represented the tenant in the 10-year lease deal.
Out of a half-dozen spaces Hebron showed him, Dr. Farag chose the OTB site because with its proximity to the courts, numerous parking garages and Gold's Gym, there's a lot of foot traffic.
How convenient to have the gym right across the street, to work off the calories from tempting cupcakes and gelato filling the display cases of the eatery, which celebrated its grand opening last week.
The asking rent for the 1,300-square-foot space was $55 per square foot, according to an online posting. David Rivera Jr. of All Points Realty/BPC Management represented the building owner, which is a partnership headed by BPC Management president Douglas Rosenberg.
The cozy cafe, which stays open for breakfast, lunch and dinner, is a step up from what was there before.
“It was this obviously less than charming, less than desirable location,” with cigarette smokers congregating out front and trash on the sidewalk, Hebron said.
“It was definitely not good. Now there's this beautiful place where you can go for a cup of coffee between court sessions.”
Gritty Livingston Street is poised for a retail makeover as big residential developments get underway, as we've reported.
Now it's one lease closer to revitalization.
ANNALS OF SANDY: SHEEPSHEAD BAY BLUES
Cruel, cruel Superstorm Sandy. Its impact lingers in hard-hit waterfront Brooklyn neighborhoods even as the one-year anniversary of the killer hurricane draws near.
One of several trouble spots is Sheepshead Bay, where the storm surge combined with overflow from sewer lines to damage properties several blocks from the shoreline.
An underground stream runs beneath Sheepshead Bay Road. Many properties on the street have pumps in their basements – but the pumps were overwhelmed.
Because of foul flood waters four feet high, the big building at 1663-1671 Sheepshead Bay Road, on the corner of Voorhies Avenue, sits vacant, its storefronts locked up tight.
“It was rendered really untenable because of the mold; we had to cancel all the leases,” said Ianthe Kallas-Bortz of WK New York, whose family-owned company has more than a dozen commercial properties in the neighborhood that were hurt by the storm.
Rather than do repairs at century-old 1663-1671 SBR (forgive the abbreviation; it saves space), WK New York is going to redevelop the property. It wasn't planning to do so until the leases expired in another eight years.
“The hurricane forced our hand,” she said.
A liquor store, a medical office, a fur-coat seller, shoe store and deli – all gone now.
“We believe a well-designed, beautiful building can change a neighborhood,” she said. “But we're nervous.”
The problem with redevelopment is it's not clear what anti-flood measures will be required.
“Nobody wants to build yet because nobody knows what's going on with FEMA and the Buildings Department,” said Kallas-Bortz, whose father, Kyrie Kallas, formed WK New York's predecessor company Waldorf Realty Co. in 1962.
There's word that buildings in Sheepshead Bay are supposed to be constructed four feet above the sidewalk – but that doesn't make sense for storefronts, Kallas-Bortz thinks.
In its other Sheepshead Bay properties, WR New York was careful to tear out the floors down to the joists and remove the plasterboard above the water line to eradicate mold. The optical store at 1607 SBR, Eye Appeal, did its own cleanup and reopened – but later shut down because the mold sprang forth. WK New York is left with an empty storefront and a big fix-up job.
In its building next door at 1611 SBR, city Buildings Department permits have just been issued to start space renovation. It will be months before the tenant, Kings & Queens Apartments, will be able to return.
Across the street at another WK building, 1610 SBR, health food seller Forces of Nature's space was gutted, and the shop has reopened. The landlord has just now been able to get Buildings Department permits to start fix-ups of the property's two other storefronts, which tenants had to vacate.
Throughout its Sheepshead Bay properties, the firm spent a boatload of money to do repairs – but “the lost rent is the thing that's killing us,” Kallas-Bortz said.
Some of the properties had flood insurance and WK got payouts, but it wasn't enough money to cover all the fix-up bills at those buildings. And now the premiums have increased 150%.
A redevelopment project she was working on before the hurricane, at 1518 Avenue Z, is a year behind schedule because of the storm and still isn't finished.
“It would have rented sooner,” she said. The hunt for tenants is ongoing.
Other Sheepshead Bay Road landlords have Sandy-spawned vacancies. The most attention-grabbing one is the site of a corporate-owned 7-Eleven, which left only its name on the outside of multi-storefront 1515 SBR.
The convenience store giant, which signed a 20-year lease, continues to pay rent, said Steven Blackburn of Premiere Properties, which manages the building.
Months ago, 7-Eleven asked for a post-Sandy rent cut for a couple years, which it would make up for later.
“But we haven't heard from them since then. We don't know what they're thinking,” Blackburn said.
Back when they were still talking, 7-Eleven's people told Blackburn they might look for a franchisee to take over the operations, or sublet the space to another store.
More recently, he was at the building one day and discovered movers packing up the convenience store's equipment. When he asked the workers why 7-Eleven was taking everything away, they said they didn't know.
The situation has left the building in a strange sort of limbo. The convenience store's absence isn't good for the property's other shopkeepers: “7-Eleven was a draw,” he said. “People would cross the street to go there.”
Officials at 7-Eleven's corporate headquarters in Dallas did not comment by deadline.
It cost Premiere Properties a bundle to do repairs in 1515 SBR's flooded basement, said Blackburn – who lives in Long Beach and had to move out of his home for a month because of Hurricane Sandy.
Larry Walton, whose family trust owns four Sheepshead Bay Road commercial buildings, spent $100,000 on post-Sandy repairs. He also lost rent while the properties were being fixed up. One tenant got a temporary rent cut; another got a permanent rent reduction.
A tenant at his building 1717 SBR closed for good after Sandy – a shop called Kama Sutra with lingerie and sex toys that had stirred controversy in the neighborhood. A cell-phone store took the space. The other buildings he owns are 1721, 1725A and 1727 SBR.
Walton – whose Manhattan Beach home was storm-struck – was upset because he was turned down for an extension on his city taxes after the storm.
“We owned these properties for 50 years. We paid all our taxes,” he said.
Across Sheepshead Bay Road from Walton's properties, there is a bit of promising news: Bill O'Brien brokered a lease with a cell-phone franchisee for space at 1732 SBR, where tennis shop Bay Sports closed after Sandy. And a lease is out with a lingerie shop from Bensonhurst (NOT the controversial Kama Sutra) for 1730 SBR, which has been vacant since Pelame, a furrier, closed in June 2012. The asking rent was $35 a square foot, the broker from M.C. O'Brien Inc. said.