Downtown Brooklyn has been undergoing a development rebirth in recent months. Construction of the Barclays Center arena is wrapping up along Atlantic Avenue, and projects, such as the Stahl Organization’s 590-foot residential tower at 388 Bridge Street, are underway.
John Catsimatidis, the president, chairman, and CEO of the Red Apple Group and Gristedes Foods, is especially proud of the neighborhood’s progress, he said, having gone to high school on Dekalb Avenue in the 1960s. And the billionaire businessman has some skin in the game in the area.
In 2010, Catsimatidis developed a 95-unit apartment building at 218 Myrtle Avenue called the Andrea, which leased out in three months. But the Andrea was just the first of four buildings the mogul has planned on the avenue. The native of Greece is now planning to break ground on the second of the four buildings at 81 Fleet Street, a 15-story tower with 160,000 square feet of residential space and 13,000 square feet of commercial space. He is also mulling plans for a three-building residential complex on the west end of the Coney Island boardwalk, which could house as many as 400 market-rate condominiums.
Catsimatidis sat down yesterday with The Real Deal at his offices on 11th Avenue — a workspace replete with photographs of himself with President Barack Obama, President Bill Clinton and Secretary of State Hillary Clinton, the late Pope John Paul II, and Fidel Castro — to talk about his Brooklyn projects and the mayoral race in 2013.
When did your plans for Myrtle Avenue begin?
We came up with the idea in 2007 of building four buildings and then 2008 happened and the world blew up. It was a $500 million project and not a single bank, no matter how big, had $500 million to spend. But I’m always a person that finds a way to go forward and instead of building [all four properties at once] I said, let’s build the smallest building first. That way we get our feet wet. We went to one of our banks and they gave us a construction loan. To this day, [the bank] tells me I’m lucky I got that construction loan because I was only one of two [people] on the whole East Coast of the country that they gave a construction loan to.
They must have a special relationship with you…
I’m a good customer. We proceeded to build it. We took it to market in the spring of 2010. After we opened it, it was fully rented within 90 days. We put a CVS drugstore in it and a Red Apple supermarket in it.
Why were you interested in developing in this particular area of Brooklyn?
I believe in transit-oriented development. We have a trillion-dollar subway system or at least that’s what it would cost to rebuild it if we had to. We should take the areas where there are existing subway stations, upzone the areas around [the stations] and whoever moves in has built-in transportation. I’ve owned those three city blocks for the last 20 years so when they upzoned the area, I became an advocate for building something. I paid almost $600,000 for it [when I bought it].
I’m proud of what’s going on in Downtown Brooklyn because I went to high school about six blocks from there: Brooklyn Technical High School on Dekalb Avenue right next to Fort Greene Park. [When I was in high school] you would not walk into Fort Greene Park unless you went with the football team. It was a tough neighborhood.
You recently filed plans for the second phase of the Myrtle Avenue development. The 15-story building is slated to have 205 units. Why was now the right time to continue the project?
We’re ready to start the third and fourth [buildings, too] but the banks won’t lend the money without the tax abatements that the city and state used to offer. We’re ready to build but we need the abatements, which I was told the state senate and the governor will take up again in the fall. The numbers don’t make sense without the tax abatements.
For the second [building], we have tax certificates. We bought the certificates at the right price about a year ago. We were able to make the economics look good [enough] for the banks to advance the money. The shovel will be in the ground next month. It will probably be ready by next fall or early spring 2014.
What will the prices be at the new building?
The neighborhood is going for anything from $45 to $47 a square foot for rentals. If it’s a 1,000-square-foot three-bedroom, it will go for about $45,000 a year.
In 2011, you submitted a proposal for three residential towers in Coney Island. Where does that project currently stand?
We completed the zoning, we completed the pretty pictures but we haven’t made a decision to push the button. The City Council has approved it. Nobody has really pushed the button in Coney Island yet. The time will come. I have to go look at it and make a decision myself. It might be a rental. The decision [on rental vs. condo] will be made once the building is completed.
Are you working on any other projects?
Nothing for publication yet. [We’re interested] in Uptown Manhattan and maybe in Long Island City.
You announced your candidacy for Mayor in 2009, but eventually endorsed Mayor Bloomberg. Do you have any interest in the position this time around?
They’re trying to get me to do it again, but I don’t need it. I don’t have an ego. I just want to do the right thing for the city. I said I’d rather find somebody qualified to run. In the last 12 years, [Mayor Bloomberg’s] leadership has led to billions and billions of dollars of investment by Europeans and by the international community. We need somebody that’s going to provide confidence to the international business community to keep supporting New York City. We are looking at people; we are talking to people, but we haven’t made any decisions.
What do you make of Christine Quinn as a candidate?
I’ve met with Christine. She’s a very lovely lady, but she has to prove that she’s capable of being tough enough to be mayor.