The Real Deal New York

Coney Island’s comeback crawl

Mapping out this season’s real estate additions in the beachside community long looking for reinvention

July 01, 2014
By C.J. Hughes

The former Childs Restaurant

The former Childs Restaurant (Photo By Michael McWeeney)

The crowds heading for the Coney Island boardwalk this summer will be greeted by a towering new roller coaster and a smattering of new restaurants and stores. But even as a long stretch of the area’s main drag takes steps toward revitalization, several parcels remain glaringly empty.

While the area’s 2009 rezoning paved the way for building hotels and residential developments, little of that has materialized. Plans were first hit by the recession, then took a second blow when Superstorm Sandy pummeled the area, a peninsula along the Atlantic Ocean in southwest Brooklyn, in 2012. With cleanup from the storm mostly complete, an overdue infrastructure project is generating hope that developers will come knocking soon.

Already, formerly barren lots are getting new buildings, and old buildings are locking in new tenants, which has helped enliven the area to a level not seen in decades, developers, landlords and brokers say. “A lot of people have been skeptical that people would ever come back down here,” said Joe Vitacco Jr., a longtime independent broker in the area. “But the crowds here are huge.” The city estimates 10 million people visited in both 2012 and 2013 and visitation is expected to rise this year. Below is a rundown of the key real estate trades and developments this season.

1. 1500 Surf Avenue

The new 115-foot tall Thunderbolt roller coaster, which opened in the middle of last month, sits on a narrow strip at West 15th Street and the Riegelmann Boardwalk. Located next to the site its predecessor coaster occupied from 1925 until the city razed it in 2000, the new orange-and-white version is run by Zamperla, the Italian company that owns and manages many Coney amusement rides. The city Economic Development Corp. said the roller coaster — with 2,233 feet of track and a stomach-churning 90-degree drop — cost nearly $10 million to construct. Zamperla, which city officials said is leasing the site through 2027, with rent based on a percentage of gross sales, did not respond to requests for comment. The Thunderbolt, EDC spokesperson Ian Fried said, is expected to draw additional private investment.

2. 1301 Surf Avenue

The imposing seven-story 1925 Shore Theater at the corner of Stillwell Avenue is off the market, after being listed briefly in 2013 for an undisclosed price by Coldwell Banker Reliable of Brooklyn. Sandy was not kind to the already-decaying landmark, which has stood empty since the 1970s. The storm ripped apart the theater’s iconic yellow-and-red sign, which has yet to be re-installed. The building, among the most significant historical structures in Coney, was once owned by the late Horace Bullard, the founder of Kansas Fried Chicken and a vocal advocate for revitalizing the neighborhood. Daughter Jasmine Bullard, who inherited his estate, has not announced plans for her father’s properties and did not respond to a request for comment.

3. 1329 Surf Avenue

New this season, and already proving popular, is Rita’s Italian Ices at West 15th Street, at the base of a two-story painted-brick building. Owned by the Russo family, the 1,500-square-foot corner storefront, which the Pennsylvania–based franchise took for five years at about $35 a square foot, was previously a members-only social club. At some point, the Russos intend to raze the building, along with several adjacent sites, to make way for a mixed-use retail and residential complex, said Vitacco, who handled the Rita’s deal. Rita’s is guaranteed space in the new structure, he added. Michael Russo, a family spokesperson, did not return a call for comment.

4. 1523 Surf Avenue

This weedy corner lot at West 16th Street is owned by Thor Equities, the development firm founded by Joseph Sitt. Thor snapped up 12.5 acres of land in Coney Island in the early 2000s and then in 2009 controversially sold seven acres back to the city for $96 million. Sitt has purchased other parcels since. This Surf Avenue parcel, which is adjacent to Caribbean restaurant Footprints Cafe, has been on the market for years, brokers say. It’s unclear what the exact size or price is for this parcel; Glenn Vogel, the Thor broker marketing it, did not return a call for comment. Sitt came under fire in the spring for allowing litter to pile up on Thor’s empty Coney Island properties, though by early last month most appeared to have been cleaned up.

5. Surf Avenue (West 16th to 19th streets)

The sea of parking lots stretching across three windswept city blocks is owned by Taconic Investment Partners and hit the market during the winter. No price has been publicly revealed for the 109,000-square-foot tract, used mainly for parking during Brooklyn Cyclones games at MCU Park across the street. The strip is in the rezoned area and can support up to 507,000 square feet of development, including apartments, if affordable housing is included. Land in the area has been trading at around $450 a square foot, commercial brokers said. Adjacent city-owned parcels — vacant since being cleared during the 1960s urban-renewal phase — have the potential to be added, according to the listing, though they would have to be purchased separately. Michael Tortorici, a broker with Ariel Property Advisors, which is listing the Taconic parcel, wouldn’t say why the firm is selling the parking lots now. Taconic, which purchased these parcels and others in 2005, was an early cheerleader for Coney’s revival, though it now appears to be looking to cash out. “We are now exploring joint ventures,” Charles Bendit, Taconic’s co-chief executive, said in an email.

6. West 21st Street and the Boardwalk

The former Childs Restaurant, a 1923 Spanish Colonial Revival structure adorned with medallions of galleons and fish, has languished despite revival efforts. But in January, the City Council approved a plan to redevelop the landmarked building as a restaurant and catering facility. The plan — by a joint venture of Coney Island Holdings, a subsidiary of iStar Financial, and the not-for-profit Coney Island USA, host of the neighborhood’s eclectic Mermaid Parade — also calls for a 5,100-seat amphitheater, slated to open by summer 2015 on the adjacent site. As part of the deal, iStar sold the property to the city for $53 million, though it will soon be leased back to the joint venture. On a recent morning, construction crews were at work on the new rooftop dining area. Coney Island USA will have dedicated access to the amphitheater for 10 years for the parade. “We may even have a party there the whole weekend,” said Dick Zigun, the group’s founder. While the renovated site will be a notable improvement, Taconic envisioned bigger plans when it bought the parcel in 2005. Its sweeping 5.5-acre assemblage — stretching from West 19th to 22nd streets and coupled with the parking lot properties north of Surf — would have allowed the firm to build nearly 2,000 apartments and 200,000 square feet of retail. Taconic lost the properties to iStar, its lender, in 2011.

7. West 15th Street and Coney Island Creek

Though Coney’s rezoning took place five years ago, development has been minimal since. Developers attribute that to the fact that the city never followed through on its promise to add $130 million of new area infrastructure. Coney’s existing pipes can’t handle the water needs of large-scale new developments, local officials say. But this spring, new pipes started going in at this dead end and will continue being installed throughout the area, said Chuck Reichenthal, district manager of Brooklyn’s Community Board 13. This portion could reach Surf Avenue by year’s end, but the entire project could take years. “This first phase lays the foundation for future investments in the area” said EDC’s Fried.

8. 602 Surf Avenue

Although still repairing major damaged caused by Sandy, the New York Aquarium also broke ground in January on a 57,000-square-foot $157 million new facility for sharks slated to open in 2015. The project comes as the city also recently removed a pedestrian bridge that once cut across the site, connecting the boardwalk with the West 8th Street elevated subway station. Pedestrians now cross at street level there. Nearby, a landscaped and spruced-up entrance to the boardwalk is planned for the dead end of West 10th Street.

9. 1208 Surf Avenue

The Coney Island Museum, which is run by the not-for-profit Coney Island USA, was scheduled to close for renovation in 2012, before Sandy hit, though the storm delayed the project by about a year. Finally, on Memorial Day Weekend, the museum cut the ribbon on its revamped building, which gained new air conditioning and heating systems and a roof, and restored its terracotta roof tiles. The renovation was paid for with $1 million in city funds earmarked for the arts, said Zigun. “You can’t see a lot of what was done here, but it was important.”

10. 837 Surf Avenue

A new pizzeria, yogurt shop and a coffee shop are poised to open in the low-slung building that housed a furniture store for years. Like other nearby businesses, the furniture store had to go because the site, across from the Cyclone roller coaster, sits inside the rezoned district and so must offer certain conforming businesses, like restaurants. The landlord, Galina Egorov, did not return a call for comment.

11. 1019 Surf Avenue

This building is now leased for the first time in years, after being bought last year for $3.1 million by Yakov Yakubov, who also owns the massive Loehmann’s Seaport Plaza complex in Sheepshead Bay. In Coney, he’s now repositioning a large one-time furniture store near the corner of West 12th Street into a retail complex with six storefronts, including one 1,500-square-foot space that’s leased to a Subway sandwich shop and slated to open this year. The other five storefronts are empty, but three of them, totaling 5,400 square feet, are now being eyed by a “national chain restaurant,” said Vitacco, who’s representing Yakubov.

12. 1230 Surf Avenue/3015 Stillwell Avenue

For years, this high-profile corner, across from the Stillwell Avenue subway terminal, housed the remains of the 1899 Henderson Music Hall, a vestige of the area’s honky-tonk past. But in 2011, Thor, the owner, razed the structure and replaced it with a one-story building containing seven retail storefronts. Five leased last summer, when the building opened, including one to It’Sugar, a national candy store chain. This summer, there’s a new tenant, the national pizza chain Little Caesar’s, which took a storefront facing Stillwell. The last remaining retail space, which also fronts Stillwell, sits next to the Brooklyn Nets shop, and has sole access to the roof. Thor is reportedly negotiating to lease it toBurgerFi, a Florida-based burger joint. What also remains empty, and controversially so, locals say, are two small arcade spaces, one on Surf and one on Stillwell. The 2009 rezoning requires that buildings in the core entertainment district dedicate about 15 percent to amusements. But no dart-and-balloon games have materialized yet. Stefan Friedman, a Thor spokesman, declined to comment on this issue.

13. Stillwell Avenue (bet. Surf and the Boardwalk)

Sitt’s Thor also owns the two huge facing lots in the middle of this block that remain empty, but are not officially on the market. When Thor first assembled its Coney holdings, it proposed building a Las Vegas-like resort with year-round amusements. And Thor says it remains interested in building on these sites if it could utilize them beyond September, which would require vastly improving the sewer and water lines there. Friedman said the city’s 2009 rezoning also requires too many parking spaces on lots that can’t handle them. Plus, the city hasn’t built a promised garage. “We are hopeful that the de Blasio administration will heed our call to fix the rezoning of the area,” Friedman said in a statement. That said, some local brokers and city officials contend that Sitt is leaving his parcels empty, and in less-than-pristine shape, to force the city to buy them.

14. 1223 Surf Avenue

This summer, a two-story 15,000-square-foot building owned by landlord Natan Bukai that is rising on a long-empty lot will welcome a 6,000-square-foot Johnny Rockets burger joint and a 2,000-square-foot Red Mango frozen yogurt shop. Another 7,100 square feet, along with a 1,500-square-foot-terrace, are now being marketed. Two tenants are expected to lease that remaining space. The complex was slated to open last year, but construction plans changed, delaying the project, said Vitacco, who added that asking rent on the remaining spaces is about $45 a square foot.

15. 1224 Surf Avenue

A small space that for years contained a shabby deli now offers LunaTics, an ice cream parlor, though the building’s owner, Shaukat Mian, hasn’t changed. And Dennis Corines, who used to own nearby Denny’s Delight, a popular local ice cream parlor which closed after the 2012 season, has worked there as a consultant. Neither Mian nor Corines could be reached for comment. But Zigun, of Coney Island USA, praised the switch. “It’s awesome that Mian has turned this into an upscale business, and that it’s not a franchise restaurant,” he said.

16. 1214 Surf Avenue

From the late 1970s until a few years ago, this store contained Denny’s Delight. But in 2011, Corines sold the building to Coney Island USA, the not-for-profit group, for $1.3 million, city finance records show. For the summer of 2012, Denny’s continued to operate under new management, but then Sandy hit, destroying its equipment. Last summer, Coney Island USA installed a vintage 1940s shooting game manufactured in Coney Island, which remains. The rear of the building serves as the museum’s annex, where performances are staged.

17. 1502 Surf Avenue

On a narrow 110,000-square-foot Bullard–owned site that runs from Surf to the Boardwalk, where the original Thunderbolt stood, plans are afoot to construct a water park, according to news reports. Zamperla, which did not return calls for comment, would reportedly operate it. But the site could also offer concessions along the boardwalk, sources close to the family say.

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