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May 25, 2007
Fulton Mall’s lease-to-buy plan
MetroNY
Forest City sold its lease rights to the "Gallery" on Fulton St. to developer Joseph Sitt back in 2001. Now the company is probably kicking itself for losing the opportunity to get in on another boondoggle:
Back in 2001, developer Joseph Sitt bought the long-term lease on what was then called the Gallery at MetroTech from Forest City Ratner for $25 million. Sitt, whose Thor Equities is looking to transform Coney Island into an upscale destination, renamed the building the Gallery at Fulton Mall and promised to turn it into an Italian palazzo, complete with tuxedoed greeters and national chain stores.
That dream was never realized, but the city did rezone the area in 2004 to encourage larger commercial development. In February, Sitt sold his lease to Albee Development LLC for $120 million.
Albee Development plans to tear down the building to put up a high-rise housing, hotel, retail and office complex. Twenty percent of rental units will be affordable to tenants of moderate income, an arrangement that would have been mandated anyway under the proposed rule changes to the 421-a tax abatement program, which the project is tapping into.
The city has approved $3.2 million in tax breaks, and after 25 years Albee Development will have the option to buy the property outright for $20 million.
The city is touting "job creation," but small businesses are losing out on the deal.
NoLandGrab: Which makes us wonder, is it some sort of law of nature that real jobs figures always fall way short of projections?
Posted by lumi at May 25, 2007 6:57 AM