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As Brooklyn Gentrifies, Developers, City Officials Struggle To Find Compromise

For years now, Brooklyn has been considered a brand rather than just a location. Developers are moving deeper into parts of the borough, but not everyone is happy about new development stretching further afield.

As Brooklyn Gentrifies, Developers, City Officials Struggle To Find Compromise
Department of City Planning's Winston Von Engel, Heritage Equity Partners' Toby Moskovitz, Rubenstein Partners' Jeremiah Kane and Charney Construction & Development's Sam Charney

“The Brooklyn brand is an incredible asset. It’s the third-most-valuable brand in the world after Coca-Cola and Apple,” Rubenstein Senior Adviser of Brooklyn Jeremiah Kane said at Bisnow’s Brooklyn New Development Frontiers event this week.

“OK, that’s not really a stat, but you feel like that could be real,” he said.

Developers are eager to milk that brand for profit. But panelists at the event said it is not just about making money, and they have a responsibility to maintain the authenticity of neighborhoods.

“The Brooklyn brand is really made up of the people who grew up here, White Italians, Hispanics or African-Americans,” NYC Department of City Planning Brooklyn Office Director Winston Von Engel said. “They’ve built this borough, they maintained it, they were the caretakers of this place when things were bad, and they now feel like they are being pushed aside.”

Blame is often leveled at developers. Community members have railed against the Rabsky Group’s plans to develop 1,146 units in an eight-building complex at the former Pfizer site in South Williamsburg, for example, although it received city council approval last October.

Housing rights activists also claim the Bedford-Union Armory, which is being developed by BFC Partners, has an affordable housing component that is out of reach for local residents.

Brookland Capital founder and CEO Boaz Gilad, a prolific Brooklyn residential developer, said the divide between rich and poor in some neighborhoods is concerning.

“I don’t know the answer, I just know that in some neighborhoods we are dealing with such a separation,” he said. “The city has been lacking in creating more of a blend with zoning in areas so we can all come together.”

As Brooklyn Gentrifies, Developers, City Officials Struggle To Find Compromise
Herrick's Mitch Korbey, DCP's Winston Von Engel, Heritage Equity Partners' Toby Moskovits, Rubenstein Partners' Jeremiah Kane and Charney Construction & Development's Sam Charney

Since Etsy signed up for 200K SF at RFR Realty and Kushner Cos.' Dumbo Heights complex in 2014, many developers have banked on a wave of demand from office tenants, although there are now concerns about a looming glut of office space.

Heritage Equity Partners CEO Toby Moskovits, whose company is joining with Rubenstein Partners to build 25 Kent Ave., an office/retail and light industrial building spanning 500K SF, said it is the wrong approach to think about “preserving the Brooklyn brand,” because it has always been an evolving borough.

“Commercial development is about allowing the city to move forward,” she said, adding it is crucial that developers create economic opportunity for people in the neighborhoods they work within.

There is no such thing as affordable housing without a job, Moskovits said. Heritage Equity Partners worked to offer internships through local schools during the development of 25 Kent.

“Moving to Brooklyn says something about the company, it says ‘we’re cutting edge, we’re innovative,'” Kane said, adding that including light industrial with its office space at 25 Kent is a way to offer attractive office space while keeping the fabric of the area. “It connects the office tenants to the history, which we think it takes advantage of the existing asset of the neighborhood, which is this incredible culture of Brooklyn.”

So far, the companies have not announced any signed leases at the building.

As Brooklyn Gentrifies, Developers, City Officials Struggle To Find Compromise
AJ Madison's Shiffy Silberstein, Brookland Capital's Boaz Gilad, Common's Brad Hargreaves, TerraCRG's Dan Marks and Hornig Capital Partners' Darren Horig

The design of buildings, and making sure they fit in with the rest of the neighborhood, is a responsibility for developers, and one they have not always taken to heart, Von Engel said.

It is not just about the architecture of the buildings, but also how new development impacts the street and the pedestrian experience. Developers should “sweat the normal, plain things,” he said, and worry about how their building will affect the street level.

He noted that development along Fourth Avenue “killed” the sidewalk, which led to the department making changes to zoning that would require an active ground floor in a building.

“Recognize the context you are building in,” he advised developers. “If you are in an emerging neighborhood ... understand how people will view your building.”

Charney Construction & Development principal Sam Charney said that some elements of the zoning resolution can impede developers’ ability to enhance a neighborhood.

At the Dime — a former Dime Savings Bank in South Williamsburg his company is redeveloping with Tavros Capital Partners to create 178 units, 100K SF of office space and 55K SF of ground-floor retail — Charney said his company is being forced to include more than 300 parking spots that will not be used.

“Can planning look at the zoning resolution, where you have 1960s parking regulations, and lessen the onerous parking requirement and let me build some affordable housing?” he said.

He also suggested that, rather than build almost an acre of parking space, he would prefer to pay into a fund that will improve the MTA crisis, which he believes the private sector should help improve.

“None of this works, the live-work [culture], cool jobs … it all goes away if the trains don’t work,” he said.