Mayor Green-Lights De Niro Movie Yard

It isn’t easy for Robert De Niro to make a move in this city without being hounded by paparazzi . But on April 26, he and Harvey Weinstein, co-chairman of Miramax Films, managed to slip quietly into Gracie Mansion for a private meeting with Mayor Rudolph Giuliani and two top aides.

By the end of the meeting, the parties had all but completed plans for a $140 million movie studio on the Brooklyn Navy Yard, a source close to the negotiations told The Observer . They reached tentative agreement, the source said, on a letter of intent–outlining a plan to transform the 199-year-old shipyard, a place where generations of ironworkers churned out warships like the U.S.S. Maine , into a dream factory with studios grand enough to compete with movie lots in Hollywood.

“The announcement of the letter of intent could come as early as this week,” one person close to the talks told The Observer .

In their current form, the plans call for the group led by Mr. De Niro to form a company that would own the studio. Twelve enormous soundstages would rise on what was once the largest naval construction facility in the country. On this ghostly landscape, where more than 71,000 workers toiled around the clock during World War II, the new complex would attract limo-trains of stars, breathe life into a depressed swath of Brooklyn and help challenge Hollywood’s hegemony.

According to sources, one of the key pieces in this immensely complex deal has all but fallen into place. Until recently, City Hall and Mr. De Niro, whose investor group includes Mr. Weinstein and Steven Roth, the influential chairman of Vornado Realty Trust, had been able to scrounge up only $70 million–half the project’s total cost. But now, sources said, a lender has expressed serious interest in providing the rest of the funds: Union Labor Life Insurance Company, which has financed Donald Trump’s 40 Wall Street and developer Joshua Muss’ Brooklyn Renaissance Plaza.

Elaine Graves, spokesman for Union Labor Life, said the company “has not approved nor it has not committed” to financing the De Niro-Miramax venture. But several sources said the company, which has backed many risky deals throughout the city, had circulated a letter to the key parties, stating its willingness to give this deal a close look.

The Observer first reported on April 5 that the all-but-concluded agreement would be financed as follows: Mr. De Niro’s group, reportedly backed by Vornado and joined by Miramax, would put up $35 million. The city-run Brooklyn Navy Yard Development Corporation, which manages and develops the site as an industrial park, would chip in $8 million. And the Giuliani administration would help subsidize the project with a $25 million low-interest loan, bringing the total to nearly $70 million, minus the lender’s possible commitment.

That’s not to say there haven’t been sticking points. There are still a host of last-minute concerns over the financial risks of the ambitious project, and those issues still could kill the deal. There were also differences, sources said, between Deputy Mayor Rudy Washington, whose office runs the Brooklyn Navy Yard, and Deputy Mayor Randy Levine, the Mayor’s chief economic adviser. “There was a disagreement, but that has been resolved,” said a source close to the negotiations. “Levine was trying to close a deal that could provide thousands of jobs, while Washington was trying to protect his agency by trying to get as much money for the Brooklyn Navy Yard as possible.”

Real estate executives and film studio heads see other hurdles ahead. In the past, high construction costs for similarly ambitious projects have frightened investors who wondered how a studio based in New York can lure business from California, where the major production companies already have their own lots. Those costs aren’t likely to be offset by fees paid by producers, particularly since intense competition from heavily subsidized studios in places like and Toronto makes it easier to keep production costs down.

“I don’t see the viability of it economically,” George Kaufman, the developer of Kaufman Astoria Studios in Queens, said of the Navy Yard project. “The movie business is strange. [Producers] spend millions on talent, but when they get to the hard stuff at the bottom, like stage rent and grip equipment, they negotiate pretty hard.”

Concerns About Cost

Vornado, for one, is concerned enough about construction costs, a source said, that it is expected to insist that the developer guarantee to keep costs down to the projected price of $140 million. They are said to be in talks with Plaza Construction, which is run by the Fisher family, one of New York’s most established real estate families.

Then there’s the site. It is located in Brooklyn’s industrial heartland, bordered to the north by Williamsburg, to the south by a sprawling lot for impounded vehicles and to the east by the hideous Brooklyn-Queens Expressway.

To get there from Manhattan by subway, you take the F train to York Street, the first stop in Brooklyn. From there, it’s a five-minute walk through a low-slung, gritty, mixed-use landscape alongside the Farragut Houses. The Farragut complex is one of the oldest housing projects in the city, built atop the old Sands Street district, which decades ago catered to Navy Yard workers with uniform stores, taverns and brothels. The area was so tough that barbershops displayed signs reading, “We fix black eyes.”

Although times have changed, the area still is not exactly hospitable territory for your typical sitcom and soap opera stars, many of whom are loath to leave SoHo and TriBeCa, much less Manhattan.

Mr. Trump, for one, thinks the Brooklyn Navy Yard is the wrong place for the likes of Mr. De Niro. “It’s a terrible location for them, terrible location,” he said.

He has a better idea for them, a better idea. “I have a much better location at 59th Street and West End Avenue … Perhaps someone in this group should call me. You know, Harvey is a friend of mine. Harvey never makes a mistake. So I know he will be calling.”

Yet those who visit the Brooklyn site are immediately taken with its possibilities. Last summer, having heard of the studio idea, Mr. De Niro journeyed out to the Navy Yard with an entourage–and was said to be struck by its quirky industrial structures, its broad open spaces and its wonderful views of the downtown Manhattan skyline.

The 15 acres set aside for the project lie empty, save for three hulking, shedlike structures that would be replaced by a 700,000-square-foot facility–a “production factory” equipped for full production of major motion pictures, sitcoms, commercials and music videos. In their current form, plans call for a dozen enormous soundstages. Another possible option is a 48,000-square-foot stage, which could handle film projects on the scale of those shot on the West Coast.

According to sources, neither Mr. De Niro nor Mr. Weinstein are entertaining the possibility of moving their headquarters out to the Navy Yard. (Miramax currently rents a floor of Mr. De Niro’s Tribeca Film Center on Greenwich Street.) But both men are said to be thinking of using the facility to shoot their own movies–a move that could help cut their studio rental costs.

A New York Booster

Mr. De Niro has long been a booster of filmmaking in New York, a sentiment that has produced mixed results (witness his long-forgotten television series, Tribeca ). These days, sources said, he and his partner at Tribeca Productions, Jane Rosenthal, have grown weary of constant trips to the West Coast, where they are shooting Rocky and Bullwinkle . And Mr. Weinstein may be feeling a burst of New York pride after his victory at the Academy Awards on March 21, which might encourage him to throw himself behind this challenge to Hollywood.

The time might be ripe for such a challenge. In 1998, the number of feature films shot in the city went up for the fifth year in a row, to 221. But most studio post-production work for those films was done on the West Coast.

Television production shooting days went up 113 percent from 1993. But those days tended to be spent on exterior shots, while most shows supposedly set in the city do their interiors in Toronto or Los Angeles.

Indeed the soundstages that do exist in the city are often booked up or are too small for major productions. Chelsea Piers has six soundstages–five of which are booked full time for Law and Order and Spin City . Kaufman, in Queens, home to Sesame Street , has six soundstages, which are fully booked most of the time.

“There is no question that New York producers need more facilities of the size and scope that are described [for] the Brooklyn Navy Yard,” said Alan Suna, chief executive of Silver Cup Studios in Long Island City, where Sex and the City and The Sopranos are filmed. “But how many of them does New York need? That’s the question.”