The Real Deal New York

Industry City’s best-laid plans

Andrew Kimball & Co. adapt on the fly to unforeseen circumstances

September 14, 2015 09:41AM
By Rich Bockmann

Andrew Kimball and Industry City

Andrew Kimball and Industry City

On a Friday afternoon in late August, the landscaped courtyard at one of Industry City’s “finger buildings” teemed with Brooklyn office types, tossing beanbags through IC-branded cornhole boards and knocking back a few cold beers.

“Someone’s having a party,” Andrew Kimball, Industry City’s CEO, said wryly.

The office soirée offers a far different scene from some of the other buildings at the Kings County site — next door, construction workers labor to renovate the building’s interior, replacing windows and tinkering with a stubborn courtyard boiler. Grime and rust weigh down the exteriors of the surrounding buildings on the 6 million-square-foot campus in Sunset Park.

The developers are betting big that an initial cash infusion of $100 million will grow to $1 billion in investment from partners and tenants. But in order to get to the other side of the 10-year plan, management first has work its way through the myriad of renovations.

The nature of plans, though, is that they sometimes go awry.

“We’ve had to be a little bit nimble and adapt while trying to stay disciplined, because in a campus this size you can easily get distracted and unfocused,” Kimble said. “And that means you’re not being efficient as you renovate it.”

When Jamestown Properties, Belvedere Capital and Angelo Gordon bought an ownership stake in the 16-building campus in 2013, the property had about $300 million worth of expenses in deferred cost, Kimball said.

The partners decided to begin renovating the four “finger buildings” closest to the subway, in part because they were in the best shape and the 60-foot widths lent themselves to being divided up easily for tenants.

But last year Kimball received an unexpected surprise when the Brooklyn Nets decided they wanted to open a $50 million, 70,000-square-foot training facility at his project. The only problem? The Nets wanted to move into Building 19, one of a group of structures on the opposite side of the campus in poor condition.

The Nets’ wishes forced Kimball to adjust the direction of the project.

“We then have been stretched a little bit in terms of the numbers of buildings we’re investing in, mostly by good news,” he said.

As the project experiences its well-documented leasing success, management has had to juggle shifting timelines to fix old manually-operated elevators and instal window-mounted heating and cooling systems.

“I’m sure somebody anticipated it, but when it actually comes in to practice and time these things out, it’s a lot,” Kimball said. “It’s a lot of complications.”

One unanticipated revelation was the discovery of high-speed Internet fiber that has allowed Industry City to be one of the best-connected properties in Brooklyn.

A previous tenant, a now-defunct data center, wired the campus’ Building 10 in the late 1990s, and Industry City has used that infrastructure to connect its tenants.

“[The original center] was formed out in Brooklyn because it is so close to New York and the customers they want to serve,” said John Meko of WiredScore, a company that ranks commercial office buildings on their Internet Connectivity and certified three buildings over the summer as the best-connected in the borough. “That made it much easier to light up the subsequent nine buildings.”

One massive question hanging over the project is whether Jamestown and its partners, which include Rubin Schron’s Cammeby’s International, can secure a rezoning from the city that will allow them to bring in more lucrative retail tenants and develop a pair of hotels and an academic building.

Without such a rezoning, Kimball estimates the current 10-year renovation plan will take two decades to complete.

In the meantime, the CEO and veteran of the Brooklyn Navy Yard’s redevelopment said the partners intend to stick to plan, even if it means saying “no” to a few tenants with pie-in-the-sky ambitions.

“We’ve got to be focused on these few buildings. We can’t go far afield and chase after dreams that will be distracting and that will take us off the focus of the moment,” he explained. “I would say there’s a massive learning curve here, but we are just starting to get into a groove.”