Ikea’s design for Red Hook

Resistance softens in hopes that store will give area retail boost

Mar.March 03, 2008 06:18 PM

Ikea, the paragon of inexpensive Swedish furniture, now appears to be a potential economic savior for Brooklyn’s gritty Red Hook neighborhood.

The irony of Ikea’s new position as a spark of retail life that might pull Red Hook back from the real estate graveyard is not lost on brokers and business owners in the neighborhood, where many in the community have strongly opposed its opening.

While the company isn’t quite heralded as a white knight, many people with personal and economic stakes in the neighborhood are looking with cautious optimism to Ikea’s pending arrival against a mostly stagnant retail backdrop.

“The fact that something’s going to happen is better than nothing happening,” said Marshall Sohne, a longtime local developer.

Double the retail space

The store’s opening, which could come as early as this spring, will be the first significant tremor in the neighborhood’s retail landscape since the supermarket Fairway opened nearly two years ago.

The $100 million, 346,000-square-foot furniture outlet will sit on a 22-acre site along Red Hook’s waterfront and will include a 6.5-acre esplanade. It will more than double the neighborhood’s total retail space, according to Elizabeth Demetriou, a project manager for the Red Hook Main Street Program at the Southwest Brooklyn Industrial Development Corporation.

Despite the traffic generated by Fairway, Red Hook has seen several businesses shutter along its main commercial drag, Van Brunt Street. Rachel Shapiro of Red Hook Realty said retail rents on Van Brunt range between $2,700 and $3,500 per month, depending on the size and location of the storefront. The average storefront, she said, is 950 square feet.

Ikea’s staunchest opponents, who filed a lawsuit against the city for allowing the project to proceed, still contend that the neighborhood will be choked by traffic and will lose its character when the store opens. But others are warming to the idea.

They say a second major destination store could help keep them in good financial shape and provide an important critical mass of customers. That could bolster property prices and demand for more retail space.

Ben Schneider, an owner of the Good Fork, a Korean-inspired restaurant at 391 Van Brunt Street, said despite his initial indifference to Ikea, he now thinks the store will bring needed customers. He said the added traffic in the neighborhood will help in keeping small businesses like his afloat.

Schneider, who has lived in Red Hook for eight years and opened the Good Fork two years ago this month, said business is good during summer and on weekends. But weekdays, especially in winter, are hit or miss.

He predicts Ikea will bring more big-box stores that could draw in more shoppers, but not necessarily prompt new people to rent or buy apartments in the neighborhood.

Schneider declined to specify Good Fork’s rent, but said the 750-square-foot restaurant leases for less than $5,000 a month. He said that’s half of what he might pay in Park Slope. And he said the restaurant has consistently turned a profit.

Meanwhile, Petite Crevette, a small seafood restaurant in Carroll Gardens, is opening a second outpost directly across the street from the new furniture store. Owner Neil Ganic said he made the decision to open there before the Ikea announcement. And while he was not enthusiastic about Ikea, he said he believes that the store’s proximity to his new location will improve customer traffic. “All business is good business for us, although quite frankly, we will not depend on Ikea for our clientele,” Ganic said during a brief telephone interview.

Still, stores like Ikea and Fairway are indisputable people magnets. And Red Hook is an isolated peninsula cut off from the rest
of Brooklyn by the Gowanus Expressway that has struggled to attract outside visitors. The area suffers a lack of public transportation — the nearest subway is on the opposite side of the highway. Real estate experts say that has kept it from taking off in the same way as other Brooklyn neighborhoods.

Randi Glickberg, a spokesperson for Fairway, said the Red Hook supermarket processes 16,000 transactions each week.

“Some customers come once a month; some may come three times a week,” she said, adding that Fairway does not collect information on customers’ zip codes, which would show shoppers’ locations.

Greg O’ Connell, the developer who owns the Fairway building, said many customers live outside the neighborhood but make
other stops in Red Hook before they head back home. In addition to the market Fairway has brought to the neighborhood, the building also added 45 rental apartments to the very small pool of residential units available in the area.

The rentals above the Fairway, in a former coffee warehouse O’Connell renovated, range in price from $2,800 to $5,800 a month. He said they were scooped up five weeks after going on the market in March 2007.

O’Connell said he is looking ahead to Ikea’s opening, which he predicts will be the best indicator of how the remaining parts of Red Hook will be developed.

“We’re all anxiously looking to see what effect it has, what days are the busiest days, how they’re going to come in and out of Red Hook,” he said.

Sohne, whose developments center on the neighborhood’s Columbia Street waterfront region, said that Fairway incited some controversy when it opened in May 2006, but said it has succeeded in drawing people to the area who would otherwise never have ventured there.

Waiting to see

Landon McGaw, the Red Hook sales director for Massey Knakal Realty, said consumer confidence is low, but that experienced developers with faith in Red Hook’s potential are continuing to buy up its assets in anticipation of change.

“A lot of owners right now are waiting to see what happens with Ikea,” he said, echoing Schneider’s point that the Swedish furniture company will pave the way for other big-box stores that will increasingly make Red Hook a weekend destination.

McGaw said if it takes off, it could put Red Hook on the map as an important retail destination. “I think there’s tremendous opportunity in big-box retail,” he said.

The furniture store got the backing of the Bloomberg administration and the City Council, despite doubts among some community members about whether it would be a good addition to the once-industrial area. Both Bloomberg and the council said the store would bring jobs to an area with higher than average unemployment rates. And as part of the deal, the company agreed to build a public esplanade, to invest in traffic mitigation and to include space for other retail.

Ikea spokesperson Joseph Roth said the store will employ 500 workers and that it recently created a $500,000 job training fund for those who live in the Red Hook zip code, including many of the low-income residents who live in nearby housing projects. And a city report concluded that the store would generate $173 million in sales a year.

Chris Byrne, owner of the bar Rocky Sullivan’s, which sits in the shadow of the Ikea site, said the new customers and workers would likely produce more business for him. “It certainly is going to bring more traffic into the area. Now, whether that’s a good thing or a bad thing, I don’t know,” he said.

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