If you ever find yourself on Fulton Street looking for discount suits or imitation designer jewelry, you’re in luck — Downtown Brooklyn has both. Just head over to Contessa Jewelers, where the sign reads, “We keep Fulton Street on ice.”
For decades, the area of Downtown Brooklyn between Willoughby and State streets has been a bustling center of low-end stores and fast-food restaurants. Now an influx of residents is anticipated at a handful of new luxury condo projects: BellTel Lofts at 365 Bridge Street, the conversion of the Williamsburgh Savings Bank building at One Hanson Place, the Oro Condos at 306 Gold Street, and a hotel/condominium project by the same developer set to rise next door. This begs the question: Where will these upscale residents eat and shop in the area?
Higher-end retail is expected to follow the residential development eventually — and admittedly, there are already signs of change. More affordable condo projects in the area, on Livingston and Schermerhorn streets, are expected to bring an initial wave of retail in their ground-floor spaces. Meanwhile, the home furnishings chain Gracious Home and an Apple computer store are said to be considering the ground-floor space at the Williamsburgh Savings Bank tower. But buyers in the neighborhood’s luxury developments are warned that if they want to see a complete turnaround, they need to be patient.
“We can’t promise buyers any retail,” said Andy Gerringer, head of new development marketing for Prudential Douglas Elliman, which is handling sales and marketing for the Oro and BellTel Lofts. “But when you come into an emerging neighborhood, the retail will follow. We can show them examples of the past: how Chelsea came around; the East Village; and we’ve done it in Williamsburg and Long Island City. All these markets came around and started showing a lot of activity.”
And residents are rewarded for buying “on what’s to come,” as Gerringer calls it. He said units at BellTel are priced around $750 per square foot, compared to the $850 or $900 one would pay for a similar apartment in Williamsburg, where quality retail is more established.
A noticeable influx of higher-end restaurants and stores over the last few years has already had an impact just south of Downtown, on Smith Street and Atlantic Avenue, on the northern edge of Carroll Gardens. And some anticipate this wave of change to continue northward.
“There has been dramatic change on Atlantic Avenue recently, between Third Avenue and Nevins or Bond,” said Millie Perry of Stribling, who is heading sales at One Hanson Place. “There’s a high-end yoga clothing shop, and a beautiful new organic ice cream store that opened.”
In a move that may pave the way for similar change in Downtown Brooklyn, this summer the neighborhood got its fifth business improvement district. There is hope that the establishment of the new Court-Livingston-Schermerhorn BID, south of the existing MetroTech and Fulton Street BIDs, will expedite the spread of more upscale retail north of Atlantic.
The new BID will provide its district’s retail stores with services like daily sidewalk cleaning and graffiti washing, which are intended to improve the shopping environment. Future plans for the organization include landscaping, additional security, and business attraction services, such as creating branding and awarding grants to help merchants renovate their facades and signage.
“You will see thousands of square feet of storefronts coming in the next five years,” said Michael Burke, executive director of policy and strategic planning for the Downtown Brooklyn Partnership, an umbrella organization that encompasses the Court-Livingston-Schermerhorn BID.
The BID is bound to the west by Court Street, to the north by Fulton Street, to the east by Flatbush Avenue and to the south by Atlantic Avenue.
Burke said that the retail spaces planned for the area’s new condo projects are relatively small, and not likely to lease to any big-box stores or national retailers.
“For the most part, you will see new spaces for neighborhood retail: grocery store, hardware store, Laundromat, things that support the local community,” Burke said. “And of course, restaurants and bars too.”
Michele Freeman, a vice president at CB Richard Ellis, thinks that for Livingston and Schermerhorn, where vacant lots afford the most amount of flexibility, retail would benefit from “a smart developer who purchases adjacent lots, and aims for a ‘strip mall’ effect.”
One developer had that idea for State Renaissance Court, a mixed-use development going up at 200 Schermerhorn. The project will include 158 rental apartments, half of which will be market rate, with around 15,500 square feet of retail space.
“In order to maintain a sense of retail continuity on the street, all except the corner spaces are only 20 or 25 feet deep,” said Sammy Brahimi, a partner of IBEC, who is developing the project. The smaller “street-oriented” spaces, as Brahimi calls them, range in size from 780 to 1,560 square feet, with asking prices of around $60 per square foot.
A gourmet grocer, whom Brahimi would not name, has already taken the building’s 5,000-square-foot space, for around $50 per square foot.
Near State Renaissance Court, at 230 Livingston Street, sits a parking lot slated to become a two-tower, mixed-use development, with 15,000 square feet of retail space. “There is a tremendous amount of mixed-use development on Livingston and Schermerhorn that is mostly upper-level residential, but all of them require ground-floor retail,” noted Burke. Dining options on Livingston are currently limited to establishments like Kennedy Fried Chicken, Popeye’s and Patty Plus, a Jamaican beef patty joint.
Right now, asking retail rents on Schermerhorn are in the $35 to $40 per-square-foot range. But with the amount of development coming online, these are expected to approach the $50 per-square-foot range currently seen one block north, on Livingston. Farther west, across Jay Street and edging into Brooklyn Heights, Livingston rents are around $60 to $70 per square foot.
“On Livingston it’s much higher, because there is more stable retail already, and because it is closer to Downtown,” Burke said. One block farther north, on Fulton Street, which is largely a pedestrian-only mall, rents are even higher because of the traffic the street receives — they can break $100 per square foot.
“The retail rents on Fulton, two blocks away, are more than double what we are asking,” Brahimi confirmed. “But I’m not saying I want Schermerhorn to become another Fulton Street.”