The Real Deal New York

The next Lincoln Center?

The BAM cultural district sees a bevy of new residential construction

March 01, 2013
By Andrew Klappholz

For years, the Bloomberg administration has been trying to revitalize the down-at-heel area around Fort Greene’s Brooklyn Academy of Music (widely known as BAM). Now, those efforts finally seem to be gaining traction, with a bevy of new residential buildings underway. The so-called Downtown Brooklyn Cultural District — between DeKalb and Atlantic avenues — is even drawing comparisons to Manhattan’s now-pricey Lincoln Center neighborhood.

“Think about what happened at the Lincoln Center area in the ’90s — that’s what’s happening to the BAM center now,” said Melissa Pianko, executive vice president of development at the Gotham Organization, which is developing 600 units of housing with DT Salazar on a site bounded by Fulton Street, Rockwell Place and Ashland Place.

Since 2004, the city has spent more than $100 million in the Downtown Brooklyn Cultural District on new facilities, public spaces and affordable housing projects. That includes the new BAM Fisher Building, which opened in 2012. And the district will soon have a total of six performing arts theaters.

But the area also has hundreds of new luxury apartments in the pipeline, along with new retail and office space. The Dermot Company’s new rental tower, 66 Rockwell Place, is set to start leasing this summer. Two Trees, meanwhile, is developing a 300-unit residential building plus a 50,000-square-foot cultural space and public plaza.

And bids were due to the city’s Department of Housing Preservation and Development early last month in response to a request for proposals for the last development parcel in the cultural district. The RFP called for a 100,000-square-foot residential, community or commercial space, with a requirement for least 15,000 square feet for cultural space and the arts. An agency spokesperson told The Real Deal that the city is aiming to announce the winning bid by late summer.

“People will look back at this and say it’s a truly remarkable renaissance,” said Douglas Steiner, developer of the Hub, a 720-unit rental tower at Flatbush Avenue and Schermerhorn Street.

 

Housing surge

BAM opened in its current location at 30 Lafayette Avenue in 1908, a time when Fort Greene was a fashionable neighborhood. But despite its status as a cultural destination, the area fell on hard times in the 1970s and ’80s.

Along with other parts of “Brownstone Brooklyn,” Fort Greene has seen a resurgence — and skyrocketing home prices — in recent years. But the more industrial area immediately surrounding BAM has lagged behind, brokers said.

“There have been so many vacant lots and junk in the area,” said veteran Brooklyn broker Chris Havens, director of commercial properties at Brooklyn-based real estate brokerage aptsandlofts.com.

That began to shift in 2004 when, in an effort to spur development, the city rezoned the Downtown Brooklyn Cultural District and other nearby areas to allow for taller buildings. The result was a spate of development that started then and is continuing to build up steam now.

Among the most striking changes are the new residential buildings in the area. Drew Spitler, director of development for Dermot, said 66 Rockwell will have 326 rental apartments, 80 percent of them market rate and 20 percent affordable. Monthly rents for the market-rate units will average around $58 per square foot, he said, with studios starting at $2,500 per month, one-bedrooms asking $3,500 and two-bedrooms asking $4,700.

According to a market report from the brokerage MNS, the average monthly rent for a studio apartment in Fort Greene was $2,341 in January, up from $1,773 in January of last year. One-bedrooms rented for an average of $3,254, up from $2,597 in the same month of 2012.

Spitler said he expects the market to support those rents fairly easily.

“There’s just not enough product to meet the demand,” he said. “You really can’t build it quick enough.”

Terry Naini, a Brooklyn-based associate broker at Town Residential, said 66 Rockwell “will have no problem” leasing up at those rates because it’s a new construction building. “There are so many people looking for these kinds of rentals,” she said.

Steiner, too, said he’s not worried about competition for renters at the Hub, despite the influx of new units in the area.

“I think it’s all good for the neighborhood,” he said. “The street experience will be fantastic.”

Pianko said Gotham is scheduled to break ground later this year on its 600-unit project, which will include 300 affordable apartments and a full floor of office space.

 

Retail renaissance

The BAM area is also undergoing significant retail changes. “The demand for retail around the area has gone through the roof,” Havens said. He noted that since the rezoning in 2004, retail rents in the cultural district have doubled or tripled. Retail space that was leasing for $30 per square foot 10 years ago could go for $100 today, he said.

Spitler said Dermot is close to signing a deal with a restaurant at 66 Rockwell, which will have 7,500 square feet of retail on Fulton and Flatbush. He declined to give further details.

The Hub will also seek a restaurant tenant for its ground-floor retail space, Steiner said.

Meanwhile, Two Trees is seeking city approval for its 32-story Enrique Norten–designed project at Flatbush and Lafayette avenues and Ashland Place.

The project will have 300,000 square feet of residential space, including some 300 rental units, said David Lombino, director of special projects at Two Trees. (The project is also an “80/20,” and Two Trees will apply to the state for affordable housing bonds financing once the project gets underway, he said.) The building will also include a 50,000-square-foot cultural facility housing a public library and three new movie screens operated by BAM. There will also be 25,000 square feet of retail and a 16,000-square-foot public plaza.

“What’s missing in that neighborhood is a meeting place,” Lombino said. “We see [the plaza] as a great public meeting place.”

With help from the city, the BAM area is also continuing to attract more cultural institutions. The nonprofit arts organization BRIC, for example, will move into the newly renovated Strand Theatre building at 647 Fulton Street this year. And the Theatre for a New Audience in 2011 broke ground on a new 299-seat theater on the site of the city-owned parking lot on Ashland Place.

Tucker Reed, president of the nonprofit Downtown Brooklyn Partnership, said within the next four years the neighborhood will have about 40 arts and cultural organizations, ranging in size from mega institutions like BAM to smaller arts incubators like the Alliance of Resident Theaters/New York.

And unlike Lincoln Center, he noted, the area will have a diverse range of venues, ranging from the 19,000-seat Barclays Center to the 200-seat BAM Fisher and century-old BAM Opera House.

“We like to think of this as a cultural district that caters to everyone — not just the New York elite,” Reed said.

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