Catsimatidis, the Credit Crunch, and the Future of Downtown
The Brooklyn Paper has an article examining whether John Catsimatidis’s stalled Myrtle Avenue development is the first of many setbacks for the grand plans to transform Downtown into a primarily residential area. Joe Chan, the president of the Downtown Brooklyn Partnership, says he’s seeing more and more developers reconsider their projects as the credit crunch…
The Brooklyn Paper has an article examining whether John Catsimatidis’s stalled Myrtle Avenue development is the first of many setbacks for the grand plans to transform Downtown into a primarily residential area. Joe Chan, the president of the Downtown Brooklyn Partnership, says he’s seeing more and more developers reconsider their projects as the credit crunch dries up financing. “Do developers developing condos [consider] a rental scenario? asks Chan. Do they [consider] a condo project with a hotel component? Absolutely. I think you see a more thorough analysis of their options. Developers’ newfound caution could mean projects are on hold for quite some time, says Ray Quartararo, of Jones Lang LaSalle, and that the full effects of the credit crunch will take years to become fully evident. As it stands now, however, the iffy market will almost certainly put a crimp in some of the ambitious developments the Downtown Brooklyn Partnership expected to see happen in the next five years. In the meantime, plenty of large projects (like BFC’s 150 Myrtle, Avalon Myrtle, the Flatbush Flatiron and Clarett’s Lawrence Street tower) are all moving ahead, so there’s still plenty of inventory in the pipeline. Still people moving into these pads will need a place to shop, and Catsimatidis was supposed to provide some key retail for the area.
Downturn! Big D’Town Project Hits the Brakes [Brooklyn Paper]
Catsimatidis “Taking a Hard Look” at 162 Myrtle Project [Brownstoner]
Downtown Brooklyn in Transition [Brownstoner]
DBP Does Its Five-Year Vision Thing [Brownstoner]
I predict that he builds just enough retail, “taxpayers” in industry jargon, to keep from having the real estate tax assessment calculated as an assemblaged. That’s another vote for “don’t want to imagine.”
Greater tax breaks? At the same time that the mayor is asking every agency to cut five percent?
Catisimatidis is simply trying to get greater tax breaks from the city – he aint leaving the land vacant – at worst he’ll build back a ‘taxpayer’ to cover the site – retail is a no brainer at this location.
As for the rest – Good – Downtown Brooklyn has gotten too much residential, the re-zoning was suppossed to be for Office space and possibly this delay will result in an eventual shift toward that direction
“As a current resident of University Towers and future resident of ORO…I can’t imagine (or maybe I just don’t want to imagine) Catisimatidis leaving the entire Flatbush to Ashland block of Myrtle as a whole in the ground!”
I vote for “don’t want to imagine”.
“Expect to see a lot of rentals and projects being flipped to the more experienced long hold investor.”
A experienced long hold investor is called a asshole these days. No one is going to hold anything for a long time.
Let me say this, it’s only the beginning! The are MAJOR credit problems right now. The credit market has frozen shut and people cannot get access to capital. Guess when the last time this happen??!!! The Great Depression. This is the topic I have been railing about and no one was listening. Now we are at the beginning of the Long Emergency.
Read this, it’s fucking scary!
Florida Schools, California Convert Auction-Rate Debt
http://www.bloomberg.com/apps/news?pid=20601087&sid=ac4g6JSjeG8A&refer=home
Taxes is going to skyrocket and people will not get tax breaks (Like Ratner).
The What
Someday this war is gonna end….
In terms of Catsimatidis, in light of the fact that he owns the land outright and does not HAVE to build housing, maybe he decides to JUST build a retail complex (grocerty, Duane Reade, etc.) to leverage the influx of new comers to the other nearby projects (ORO, BFC Avalon). As a current resident of University Towers and future resident of ORO, I would certainly hope so. I can’t imagine (or maybe I just don’t want to imagine) Catisimatidis leaving the entire Flatbush to Ashland block of Myrtle as a whole in the ground!
Catsimatidis = canary in coal mine
I work downtown and am in one of the classes of people that will receive preference for the on-site affordable units in 150 Myrtle Avenue, the BFC project. I gave serious thought to applying for one of those units despite a hunch that there will be greater selection of condos at more attractive prices a year or so down the road. But when I read that Catsimatidis might not go through with his project, which was all of the area retail, that settled the issue for me: I’m going wait and see.
It’s always tough sell to develop an area close to the projects. No way around it. Don’t trust developers to do the right thing by making sure there’s retail or supermarket, or to do the people in the nabe any favor. The mighty dollar is god. If their investment won’t return profitably, they’ll stall or back out of the deal. Meantime, the lot is empty and blighted, and everyone thought things were rosy. What’s he afraid of? The banks don’t trust him enough. And he plans to run for mayor?
It’s the smartest thing he could have done. I’m really amazed that despite securing financing a few of the large builds are still moving ahead. All these rookie, uninformed brokers telling owners that they can expect these inflated price per square foot sellouts are doing what all the speculators who lost their shirts in the 80’s did; not listening to the market and showing their inexperience as developers, especially with that BFC project but also with some of the more experienced developers like Clarett, can’t imagine what their investors are going through. Interest rates actually went up and buyers are holding out. Expect a major correction, banks pulling even more funding and after July development stalling due to 421-A. Expect to see a lot of rentals and projects being flipped to the more experienced long hold investor.