The California teachers’ pension fund is getting in on the Coney Island building boom.
LCOR, the development firm majority-owned by the California State Teachers Retirement System, has struck a deal that paves the way for the firm to construct a large apartment building a block from the boardwalk.
“We are currently in the initial planning stages and anticipate a mixed-income residential development, with up to 30 percent of the apartments designated as affordable,” LCOR senior vice president Anthony Tortora told The Real Deal.
LCOR signed a 99-year ground lease to gain control of a nearly full-block parking lot at 1517 Surf Avenue, which allows for roughly 325,000 buildable square feet.
Lease payments over the term of the deal will total roughly $100 million, a source familiar with the deal told TRD.
The parking lot sits across the street from the Coney Island institution Gargiulo’s and is owned by the Russo family that runs the Italian restaurant.
“Our family has witnessed the resurgence of Coney Island during the past few years,” Michael Russo said. “This was a great opportunity to help expedite the transformation.”
A JLL team of Steven Rutman, Rob Hinckley and Jeff Julien negotiated the sale on behalf of the Russos.
Rutman said the development site, which sits about two blocks from Coney Island’s main subway station at Stillwell Avenue, is the closest residential development site on Surf Avenue to the transit hub. He said that the area’s zoning, which emphasizes entertainment and amusement uses between Surf Avenue and the Riegelmann Boardwalk, ensures that “views of the Atlantic Ocean are protected in perpetuity.”
LCOR joins a crowded field of developers working on projects that aim to transform Coney Island from what had been a dated seasonal attraction to a booming live-work-play neighborhood — a goal the Bloomberg administration began pursuing in the mid 2000s.
Two blocks west of LCOR’s site, for example, Taconic Investment Partners and the Prusik Group are building Phase 1 of a large mixed-use development at 1709 Surf Avenue that will include 1,000 residential units, 125,000 square feet of retail and 80,000 square feet of office space.
John Catsimatidis’ Red Apple Group is developing a pair of rental towers further west at 3514 Surf Avenue, and closer to the beach. Dubbed Ocean Dreams, it will include 425 units.
And Ruby Schron’s Cammeby’s International Group is developing what it claims will be the tallest building in southern Brooklyn: a 42-story tower at 532 Neptune Avenue with 576 residential units.
LCOR, meanwhile, is selling condominiums at its 308-unit conversion of the former Financial District office building-turned rental tower at 25 Broad Street. The developer is projecting a total sellout of $395 million.