WSJ Bullish on The Fulton Mall

The Wall Street Journal has a lengthy, and rather optimistic, article about the renaissance of the Fulton Mall today. It’s behind the paywall but has been liberated by a reader and posted below.

Chains Set Up Shop on Fulton; Merchants, Developers Are Cleaning Up a Brooklyn Strip in Hopes of a Rebirth

By Anthony Klan
25 October 2010
The Wall Street Journal (Online and Print)

With upscale housing developments sprouting in downtown Brooklyn, some developers and retailers are betting big bucks that the Fulton Street Mall is poised for a rebirth.

National retailers like Filene’s Basement and SYMS, H&M and Aéropostale have recently announced they are setting up shop along the strip which was one of the grand shopping districts of Brooklyn before its department stores were replaced by stores selling such goods as cheap jewelry, knickknacks and electronics. Developers are spending millions on upgrading other properties in hopes of attracting other chains.

The renaissance of Fulton—which stretches between Boerum Place and Flatbush Avenue—has been predicted before with little actual change. But local business owners say it’s different this time because of 5,000 new condos and rental apartments that have been added in the downtown Brooklyn area in the past three years.

“The area is attracting the Manhattan type of resident,” says developer Albert Laboz, who leased 30,000 square feet to H&M at his store at 497 Fulton St. “These are those younger people that would otherwise have bought in Manhattan but have been priced out of that market.”

Skeptics have a blunter message: Don’t hold your breath. “They are redesigning the strip, making it look better,” says Prudential Douglas Elliman retail leasing chairman Faith Hope Consolo. “But it’s been the street of 99-cent stores and I don’t see it changing dramatically.”

Fulton Street in its halcyon days was home to four departments owned by such companies as May Department Stores and E.J. Korvette and Abraham & Straus. As downtown Brooklyn deteriorated in the 1970s and 1980s, they closed one-by-one, with the exception of the A&S, which was converted to a Macy’s in the mid-1990s. Under pressure from local merchants, the city converted the strip into an open air mall with traffic limited to buses.

But the hoped-for revitalization never happened. Today paint is peeling from buildings, several stores are boarded up and many shop signs are missing letters.

“They try and pretend to make it upscale but I don’t think there is any possibility of that at all because the customer base is not there,” Ms. Consolo says.

Merchants and developers are optimistic that this time will be different because housing and pedestrian traffic patterns are changing. Many of the new upscale apartment towers—such as the 650-unit Avalon Fort Greene rental building and Toren, a condo—are a few blocks to the north on Flatbush Avenue, a new area for this kind of residential development. While condo sales have been slow and developers have had to cut prices, there’s been a healthy demand for rental units priced at about $2,000 a month for a one-bedroom.

There’s also a greater circulation of affluent shoppers as residents of these buildings make their way over to the upscale restaurants and stores in Cobble Hill. New stores to show up in that area include a Barneys Co-Op, which just opened on Atlantic Avenue next to a popular Trader Joe’s.

Clearly some retailers and developers are banking on the area changing further. In the summer, developers Eli Gindi and Stanley Chera’s Crown Acquisitions acquired the five-story building at 490 Fulton St. and since then have leased 40,000 square feet to Filene’s Basement and SYMS and last week singed an 18,000 square foot deal with Planet Fitness.

Arcadia Realty Trust this fall broke ground on the first new building to be developed on the mall for years: the beginning of a mixed use complex named City Point. The first 50,000-square- foot phase is scheduled to be completed in early 2012. Eventually it will cover an entire block with some 1.5 million square feet of retail and residential space.
The New York City Economic Development Corporation and the Downtown Brooklyn Partnership comprising local developers, retailers and other stakeholders—are spending $15 million cleaning up the grungy strip, improving landscaping, installing new street lighting and some additional public spaces.

Michael Glimcher of retail giant Glimcher Realty Trust— which has no current development interests in Downtown Brooklyn—says his group is “absolutely” interested in running a ruler over the area.

“We want to be where the people are and more and more people are flocking to urban areas,” Mr. Glimcher says. “You can’t beat density, you can’t beat masses of people”.
Mr. Glimcher says there’s certainly a precedent for areas being transformed. “Third Street Promenade at Santa Monica used to be a small hippy beach community and now it’s made the full swing, it’s anchored by a luxury mall with the likes of Tiffanies and Bloomingdales,” says Mr. Glimcher.

But he warns such moves are often far from smooth sailing: “It’s always difficult to make a new first impression when areas have been out of favor for such a long time.”
Even some boosters of downtown Brooklyn agree that a transformation of Fulton Mall will take time. “If you want to find the Rip Van Winkle place to come back to in 10 years, this would be it,” says Fred Harris, a senior vice president of development for AvalonBay, the developer of the rental tower, Avalon Fort Greene.