The city last week awarded $20 million in tax-exempt federal stimulus bonds to get shovels in the ground for the long-stalled mixed retail/residential project at Albee Square.
The city created the bond program, called Recover NYC, last June to help for-profit developers in getting their projects off the ground.
The bonds will go toward the financing for the commercial development of the project, dubbed City Point. The financing for the residential end of the project will be done separately. “We’ve been concerned about the lack of commercial lending for long-term construction projects during the economic downturn, so we’re eager to sustain the momentum in neighborhoods like downtown Brooklyn that had benefited from significant private investment in good times but are seeing little today,” said David Lombino, spokesperson for the city’s Economic Development Corporation.
The city-owned vacant site, formerly the Albee Square Mall, is bounded by where Dekalb Avenue meets the Fulton Street Mall and extends north to where Willoughby Street meets Flatbush Avenue.
The city has been in negotiations with the new ownership Albee Development LLC, a consortium of PA Associates/Acadia Realty Trust/McFarlane Realty, since the group purchased the long-term lease for the land from developer Joe Sitt for a reported $125 million in 2007.
In the complicated three-way deal, the city’s Economic Development Corporation (EDC) worked out a separate contact with the new lessee that involved development and transferring ownership over a period of time.
When first announced, the developer released renderings that would have included a tower as tall as 65 stories. However, with the downturn in the economy, financing for the project dried up.
Now, much like the Atlantic Yards project, the development will be built in two phases.
Lombino said phase one of City Point will include up to 184,000 square feet of retail, which will get financing through the tax-exempt stimulus bonds, and up to 210,000 square feet of residential, which the developer has to finance separately.
The residential includes 262 units with 120 of those being affordable to moderate- and low-income residents.
Lombino said 40,000 square feet of the retail square footage will begin in March 2010 with a completion date of March 2012.
The developer said the rest of the retail space and all the residential units will begin construction by March 2011 and be completed by March 2014.
Downtown Brooklyn Partnership Joe Chan welcomed the city’s decision.
“The project is highly important for Downtown Brooklyn in that it will generate hundreds of jobs and a critical mass of affordable housing, and it will be one of the new anchors to Downtown Brooklyn,” he said.
Albee Development LLC spokesperson Tom Montvel-Cohen said the project is currently being redesigned and the first phase will be about 15 stories.
The design has to be approved by the city’s Public Design Commission as the property is city owned. It should be approved by the end of the year, he said.
Montvel-Cohen said the retail tenants will most likely be a mix of national chains and smaller mom and pop stores.
“The stimulus funds are a crucial element in allowing this project to move forward,” he said.
The city’s Capital Resource Corporation will hold a hearingbefore the issuance of the stimulus bonds on Sept. 10 and is expected to approve them on Sept. 13.