DOWNTOWN BROOKLYN — Supermarket magnate John Catsimatidis is putting his massive Myrtle Avenue project on hold because of troubles with financing that could affect other Brooklyn projects, he confirmed to the Eagle.

The project would have included 552 market-rate units, 215 below market-rate units, and more than 200,000 square feet of retail space. Demolition of the pre-existing buildings on the two large blocks between Prince Street and Ashland Place has already taken place.

Catsimatidis owns the Gristedes supermarket chain, an energy company in Pennsylvania, a fleet of corporate aircraft, and Red Apple Real Estate, which is a partner in the Myrtle Avenue project.

He said the $500 million in bonds needed to construct the project is not available. “They [the Housing Development Corporation] don’t necessarily have the bonding available right now, and they may have it in the very near future,� said Catsimatidis. “We would still need a letter of credit for the bonds, and you know what’s happening in the credit market for bonding.�

He wouldn’t name specific projects, but did acknowledge that other large housing developments in the vicinity of Downtown Brooklyn, also counting on bond financing, could be put on hold.

Deb Howard, executive director of the Pratt Area Community Council, which would handle the project’s affordable housing component when completed, said a lot of projects with affordable housing components are waiting in line for bonds right now.

“HDC, right now, has about $1 billion lined up in their pipeline for bond financing and only an allocation for $400 million,� she said. “There’s a problem right now for the whole affordable housing industry.� New York magazine first mentioned Catsimatidis putting his project on hold in a feature on the looming recession.

Catsimatidis said the mortgage crisis could also make it difficult to sell apartments once completed. “It’s not us that have changed, it’s not the [desirability of] the area that has changed, it’s the banks that are in deep trouble. And the people who are buying these apartments are in a constrained financial situation.�

Banks aren’t giving out mortgages as readily, and require higher credit scores and a larger down payment when they do, slowing down sales. Some projects originally envisioned as exclusively condominiums have resorted to renting units as a result, acknowledged Catsimatidis, who is still considering running for mayor.

“It think the credit market will straighten itself out. It might not straighten itself out in the next month or so, but it will straighten itself out eventually,� said Catsimatidis.

The Eagle previously reported that some residents of the Ingersoll and Walt Whitman housing complexes are distraught that their grocery store, Laundromat and drug store were demolished to make way for the project.

Once completed, the project would add more retail to the strip than ever before, but meanwhile residents on the Myrtle Avenue side have to travel farther to run errands.

“It’s a hardship. It’s really a hardship,� said Ingersoll tenant Dorothy Berry. Elderly and handicap people are especially suffering, she said, because without laundry machines in the buildings, they have to push their clothing several blocks farther uphill.

© Brooklyn Daily Eagle 2007
All materials posted on BrooklynEagle.com are protected by United States copyright law.
Just a reminder, though -- It’s not considered polite to paste the entire story on your blog. Most blogs post a summary or the first paragraph,( 40 words) then post a link to the rest of the story. That helps increase click-throughs for everyone, and minimizes copyright issues. So please keep posting, but not the entire article. arturc at att.net

Main Office 718 422 7400