The Manhattan Institute’s
Center for Rethinking Development
Ideas that shape the city’s planning, housing, and development
A Monthly Newsletter by Julia Vitullo-Martin, MI Senior Fellow

Thinking about Brooklyn Markets

Julia Vitullo-Martin, December 2003

Were it free-standing Brooklyn would be the nation's fourth largest city--and one of its most renowned. Brooklyn has always had the makings of a great independent city--with a strong mixed economy, good public transportation, a dazzling waterfront, splendid parks, hard-working populace, and gorgeous residential neighborhoods, including Victorian Flatbush, which has the nation's largest concentration of Victorian houses. The city's most populous borough, Brooklyn has long been known as both the borough of immigrants and the borough of churches. Now its peculiar combination of excellent museums and theaters, affluent residents, and loft-living artists is transforming it into the borough of the arts as well.

But it has also had a sorry downtown, corrupt machine politics, and, until 1992, more than its share of crime, both violent and petty--three problems within the realm of government to fix.

Today Brooklyn is in such demand as a place to work and live that it is "its own market," says Paul Travis, managing partner in Washington Square Partners, which has worked as development advisers to the Downtown Brooklyn Council. "It always used to be that the Brooklyn residential market was a product of the Manhattan market. But now an amazing number of people would rather live there, including people from out of town who choose Park Slope or Williamsburg. They've heard about those neighborhoods, and that's where they want to be."

Or as a smug artist announced in a recent New Yorker cartoon, "I live in the Brooklyn arrondissement."

Yet while central planners housed in Manhattan have recognized Brooklyn's assets since the O'Dwyer years, the Bloomberg administration is the first to push hard to remove the shackles of outdated zoning that have held Brooklyn back--and to permit office and residential density on the waterfront and at transportation hubs.

The first principle of good development, well understood by Deputy Mayor for Economic Development & Rebuilding Dan Doctoroff, is that market forces should be allowed to operate whenever possible. If the market will pay, let it. Don't waste our tax dollars when private investors are willing to put up their dollars. Government subsidies should only be used when a highly desirable project cannot be financed entirely with private funds. This can happen when a neighborhood is so deteriorated that no private firm will risk its own money without the government going first--downtown Brooklyn in the 1980s being an excellent example. But once a neighborhood is back on its feet--downtown Brooklyn today--direct the government subsidies some place they're needed--Brooklyn's East New York, for example. A second principle is that high density is good. It pays for upgraded services, including government ones like public transportation and private ones such as high-quality retail, gyms, spas, etc. Good services in turn make for safe, lively streets and therefore good neighborhoods. Third, this also means that mixed uses--residential and commercial, for sure, some manufacturing sometime--are preferable to single uses, especially those housed in hostile-looking enclave buildings. Fourth, zoning should not artificially restrict the projects a market is willing to build in a revitalizing neighborhood.

YES! ON DOWNTOWN BROOKLYN REDEVELOPMENT PLAN The heart of the plan, to use Brooklyn Borough President Marty Markowitz's words, is to "solidify" downtown Brooklyn as New York's third major business hub in the New York metropolitan region, while maintaining Brooklyn as "a livable community with its own unique identity."

The downtown rezoning will fit nicely with the major rezoning put forward last fall for Greenpoint and Williamsburg by Deputy Mayor Doctoroff and Amanda Burden, Director of the Department of City Planning.

They are proposing residential and commercial development where it is now forbidden. Covering a 1.6-mile stretch along the river and encompassing some 170 blocks, the rezoning would allow the development of up to 65,000 housing units. Some 49 acres will be dedicated to publicly accessible open space, including a continuous 2-mile esplanade along the East River. The overall principle is the coexistence of mixed uses.

The downtown plan calls for increased zoning allowances, government assistance in site assemblage, and infrastructure improvements. The intent is to create some 5.4 million square feet of new commercial space and about 1,000 units of housing. It has been worked out in conjunction with community groups and major institutions, such as Pratt, Polytechnic University, St. Francis College, Brooklyn Union Gas, and the Brooklyn Academy of Music (BAM). BAM, for example, has proposed a $700 million cultural district, much of which is already under construction.

The redevelopment details, such as three million-square-feet office towers abutting a new 1.5-acre park on Willoughby Street, are clearly laid out on the Department of City Planning's web site. The details will change as the plan, which was certified by City Planning a few weeks ago, wends its way through ULURP (Uniform Land Use Review Procedure). But the Bloomberg administration's admirable ideas will stay-high density, mixed residential and commercial, public open spaces, multi-use towers providing round-the-clock services, and vital retail on the street. As James Whelan, former director of the Downtown Brooklyn Council told the New York Times last year, "Downtown Brooklyn has got to be ready in the next up-cycle," adding that Brooklyn needs a "true downtown" with people there 24 hours a day. Or, as Whelan entitled an article in Real Estate Weekly, "Downtown Brooklyn is New York's Growth Solution."

NO! ON WITNESSES REZONING The one principle that every major urban planner agrees on today is the importance of lively street life, which can rarely be achieved without retail uses on the street. Nonetheless, not far from downtown Brooklyn, in the neighborhood called Dumbo (Down Under the Manhattan Bridge Overpass), the Jehovah's Witnesses are proposing a huge housing complex--with no retail whatsoever.

The Witnesses need a rezoning to develop their 1,000-unit residential six-building complex at 85 Jay Street, bounded by Bridge, Front, and York Streets. The proposal has merit. The high density is appropriate alongside Dumbo's only subway station. The development will include an underground garage for about 1,100 cars, thereby not exacerbating the neighborhood's on-street parking problem. Architectural firm Beyer Blinder & Belle, well-known for making projects work in historic districts, has designed buildings to fit into the neighborhood of brownstones and old industrial buildings. What's more, the Witnesses maintain their existing property extremely well--never any graffiti, litter, or the slightest sign of neglect.

Nonetheless, a major development without retail does not deserve rezoning from the city. Dumbo residents, who have set up a letter-writing campaign at 85jaystreet.org, note that "the neighborhood has nurtured growth in many wonderful forms."

YES! YET ANOTHER REASON TO REZONE MANUFACTURING AREAS While many liberals oppose rezoning manufacturing areas because they fear a further loss of manufacturing jobs, they have a very different reason for supporting it. Rezoning will impose an imprimatur of legality on the many illegal residential lofts whose conversion from manufacturing uses has helped fuel Brooklyn's boom. "I don't think you ever want to have regulations or laws that can't be enforced," says Doctoroff about legalization. "To some extent the zoning proposal recognizes that market forces are such that conversions would continue if there's no substantial enforcement of the code. So the right thing to do is to recognize the reality." According to City Planning, the reality is that over 100 industrial buildings in Greenpoint and Williamsburg alone have been converted to residential use.

Many tenants living in illegally converted lofts were given a bad jolt by a recent state Supreme Court ruling that manufacturing zoning in and of itself meant that tenants had no recourse in eviction proceedings.

MAYBE! ON FOREST CITY RATNER MetroTech, the 16-acre complex developed by Forest City Ratner in the 1980s, "in some ways started it all," says Paul Travis, speaking of Brooklyn's boom. "Manhattan had the Class A office buildings back then, and Brooklyn was thought of as second class. MetroTech really was a revolution." Or as Jan Rosenberg, Professor of Sociology at Long Island University's downtown Brooklyn campus, says, "People just didn't want to invest here. Saying 'downtown Brooklyn' wasn't quite as bad as saying 'the South Bronx,' but it was close. The original plan came from Polytechnic, which warned it was going to move out if they couldn't save the neighborhood, which was dangerous and deserted and quickly becoming a slum. MetroTech reversed all that."

Highly subsidized by government, MetroTech has since spawned substantial private commercial and residential development.

Forest City Ratner is now finishing construction on its Atlantic Center Mall, not far from BAM. Bruce Ratner, principal of Forest City Ratner, is proposing a $2.5 billion, 19,000-seat arena and mixed residential-office project across the street. The arena, which Ratner hopes will house the New Jersey Nets, is to be designed by Los Angeles architect Frank Gehry.

As a hub for nine subway lines and the Long Island Rail Road, the arena's site is well served by public transportation, which would help ease the fearful traffic congestion that seems inevitable with major sports arenas.

But how real is the plan? At $275 million, Mr. Ratner holds the current high bid for the Nets, though the bidding is far from over. The owners say they want $300 million.

New Jersey will not let the Nets go easily, and Governor McGreevey immediately announced that the Port Authority will build a 1.9-mile rail link connecting the Meadowlands with Secaucus, which would in turn connect to New Jersey Transit.

In a press conference, Mr. Ratner said that the project would be "almost exclusively privately financed," though he said that some tax revenues would have to be "diverted" to pay for some of it. He also suggested that the Metropolitan Transportation Authority transfer some of its land to the project, and that the state condemn the rest.

These plans may well be good, though neighborhood activists from nearby Park Slope have already been out in force protesting. The problem is that the only sure test we have for controversial projects is the market. Yet sports arenas, which have a history of being loss leaders for the governments that subsidize them, are seldom built on market principles. And when the market is undermined by government subsidies--some obvious, some hidden--the justification for a project is no longer economic demand but political. LIU Professor Rosenberg, who would like to see the arena built on the long-undeveloped site, nonetheless worries about subsidies, which she calls "affirmative action for developers. MetroTech needed that government boost back in the 80s when Brooklyn was down. But now?"

So strong are most markets in downtown Brooklyn & environs--residential, commercial, retail--that subsidies should now be regarded as the last, and certainly no longer the first, resort.

WHAT’S NEXT: CITY HEARINGS & DECISIONS
The Department of City Planning certified the Downtown Brooklyn Plan's ULURP applications as complete on Dec. 1, setting off the public review clock. Community Board 2 has 60 days to hold hearings and issue a recommendation. Then the Brooklyn Borough President, an exuberant supporter of the plan, will have 30 days to issue his almost surely positive recommendation, which will send the plan back to the City Planning Commission for its 60 days, when a hearing will be held--probably in March 2004--and a vote taken. The City Council will then have another 50 days to hold a public hearing and vote.

Bruce Ratner's arena faces many high hurdles--the first being that he must buy the Nets. Brooklyn is awash in rumors that he will then be exempted from public review procedures--which seems unlikely. But then again, much about this proposal is unlikely.


December 2003
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LINKS OF THE MONTH
Department of City Planning
Community Gazette for District 33: Greenpoint, Williamsburg, Brooklyn Heights, Dumbo & Park Slope
Community Gazette for District 35: Clinton Hill, Fort Greene & Prospect Heights
Community Gazette for District 39: Carroll Gardens, Kensington, Park Slope & Windsor Terrace
Brooklyn Academy of Music
Victorian Flatbush
MetroTech
The Prospect Park Alliance
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UPDATES
The mayor's Staten Island Growth Management Task Force released its report
Ignoring a threatened mayoral veto, the City Council passed the lead abatement bill 44 to 5, with one abstention
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“Development subsidies are like affirmative action. Government needs to know when to implement them–-and when to stop.”
Jan Rosenberg, Professor of Sociology, Long Island University, Brooklyn campus
 
“What we’re going to use is those extra taxes that would not have existed otherwise to pay for our contribution.”
Dan Doctoroff, Deputy Mayor, on the proposed arena