Brooklyn Developers Talk Projects and Possibilities

Michael Stern, JDS Development (left) and Michael Rudin, Rudin Management, discussed their Brooklyn efforts.

NEW YORK CITY—With no shortage of projects, or concerns in their sights, two prolific Brooklyn developers provided a window into their minds at the recent Only Brooklyn conference, hosted by Terra CRG, at the Brooklyn Academy of Music. “Our residential project at 9 DeKalb is very befitting of a borough that’s not second to anybody,” asserted Michael Stern, CEO, JDS Development. It’s a juxtaposition of old and new as the site of the landmarked Dime Savings Bank, which we’re folding into a new building. There will be 100,000 square feet of retail space, about 500 apartments and some office space. The transportation adjacency there is unmatched; 9 DeKalb is at the nexis of the next great retail hub in Brooklyn.” On the office front, added Michael Rudin, VP, Rudin Management Co., “There hasn’t been a Class A office property built from the ground up in Brooklyn since Metro Tech so we’re working on a 670,000 commercial building [at the Brooklyn Navy Yard, called Dock 72]. It’s an opportunity to bring something to this market that’s starved for office product. A lot of companies want to be here so we took the chance to build like they do across the river.” In concert with Boston Properties, Rudin Management is creating the property with nods to its location. Surrounded by water on three sides of the building, Dock 72 “has a nautical feeling; it looks like shipping containers on top of each other,” said Rudin. “It’s only 16 stories but there are spectacular views from all sides. Plus there are active ship repair location next to us on two sides so that provides unique views and experiences.” The Brooklyn office market offers wide appeal for tenants, Rudin contends. “You see tenants moving to Brooklyn every day with the increase of residential development over the last 10 to 15 years. There’s a highly educated workforce here and companies are noticing that.” Further, he said, “There’s also the REAP [Relocation and Employment Assistance Program, which provides a business tax credit to companies that relocate to Brooklyn and other areas of the city]—which expires next year but will hopefully get extended—and there’s no occupancy or construction tax, whereas in Manhattan, new office rents start in the $80s, $90s to $100s or higher, without incentives or benefits, so we think Dock 72 is an attractive building economically for any type of tenant.” Rudin continued, “We hope to attract not just TAMI firms but creative class companies, such as those computers and 3-D printers to create things. Quality credit tenants are key but with the number of startups in the area, and companies that are either rapidly growing or shrinking, we’re looking for diversity.” Developing at the Navy Yard has its enticements for Rudin Management and Boston Properties too, he noted. “The Navy Yard is city owned land so we don’t pay real estate taxes there that we’d have to pass onto tenants.” Still, Rudin is thinking beyond office development for the years to come. “My family’s passion has been multifamily but the last building we did in 1971 so we’d like to get back to that business. Our last residential project was a condominium,” he said, referring to Greenwich Lane, in Greenwich Village. For Stern, multifamily development is a bit of a sore spot. “We have a pipeline of projects but we’re waiting for 421a. I can’t understate the importance of getting that legislation back.” But Rudin’s concern is  infrastructure. “The biggest issue along the Brooklyn/Queens waterfront is that there’s no North/South connection. The BQX—Mayor Bill de Blasio’s proposed streetcar for the area—would be a game changer for the entire Brooklyn/Queens waterfront and the communities there that are underserved.” Still, the developers are bullish on Brooklyn. “We see a lot of opportunity in Gowanus,” revealed Stern. “There’s optimism that it’ll be among the next targets for rezoning.” The ground work has already been laid there, and throughout the borough. “There’s great transportation, good retail adjacency and a 60,000-square-foot Whole Foods. You can feel the energy of change around Brooklyn—and it’s very exciting.”